CMIE, DSP ML up GDP growth forecast to 6.2%
Mumbai: The economic think-tanks CMIE and DSP Merrill Lynch on Monday scaled up the GDP growth projections to 6.2 per cent this fiscal on back of the faster-than expected recovery, even as professional forecasters in an RBI survey scaled it down to six per cent from 6.5 per cent.
The Centre for Monitoring Indian Economy (CMIE) has revised upwards its earlier estimate of six per cent GDP growth forecast to 6.2 per cent, while financial services major DSP Merrill Lynch also raised it from 5.8 per cent to 6.2 per cent for the current fiscal.
The upward revision in the GDP projection comes on the back of a better performance of the economy in the first half of fiscal, CMIE said in its latest report today.
"The economy's performance during the first-half of 2009-10 has turned out much better than our expectations. This warrants an upward revision in our real GDP growth for the second consecutive month. The revision this time is from six per cent to 6.2 per cent," it said.
CMIE, had last month, raised GDP growth forecast to six per cent from 5.8 per cent announced in September.
DSP Merrill Lynch also said it is revising the estimate due to the faster-than-expected industrial recovery.
Meanwhile, the RBI said, "forecasters have revised their real GDP growth rate downwards to six per cent in 2009-10 from 6.5 per cent in the last survey." Though this is somewhat in line with the RBI's own estimate of six per cent with an upward bias, this is below the PM's 6.5 per cent and the Planning Commission's 6.3 per cent forecast.
Forecasters cut growth to 6% this fiscal
The economic growth forecast has been slashed to 6 per cent from 6.5 per cent for the current fiscal, according to a RBI survey among professional forecasters.
"Forecasters have revised their real GDP growth rate downwards to 6 per cent in 2009-10 from 6.5 per cent in the last survey," the central bank said in a statement here today.
The outlook of 6 per cent, though somewhat in line with RBI's estimate of 6 per cent with upward bias, is below the forecast of about 6.5 per cent by Prime Minister Manmohan Singh and that of 6.3 per cent by the Planning Commission.
As per the survey, forecast for agriculture has been lowered to (-)1.4 per cent from 2.5 per cent. For industry, it has been raised to 6.3 per cent from 4.8 per cent, and for services, it has been cut to 8.1 per cent from 8.3 per cent.
Results of the survey represent views of the respondent forecasters and do not reflect the views of the RBI, which polled 21 respondents on macro economic indicators like GDP, fiscal deficit, inflation, interest rates and credit growth.
Fiscal deficit forecast of the central government has been jacked up to 7 per cent of GDP from the earlier view of 6.8 per cent, which remains the government's view for 2009-10.
The forecasters fear higher inflation of 4 per cent and 6.8 per cent in the third and fourth quarters, respectively, from their earlier view of 2.5 and 5.4 per cent.
Forecasters have assigned highest 34.3 per cent chance that inflation will be in the range 6 to 6.9 per cent in 2009-10.
However, in FY'11, forecasters gave highest 38.8 per cent chance that inflation will fall in 5-5.9 per cent range.
The forecasters retained their gross domestic product growth forecast for the second quarter at 6.2 per cent, while expecting 5.7 per cent and 6.7 per cent growth respectively in the third and fourth quarters, RBI said.
For 2010-11, they assigned highest probability of 49.3 per cent to 7.5-7.9 per cent growth range for the GDP.
India Inc's profit prospect in 2009-10 has been jacked up to 10 per cent from 7.5 per cent. Growth in profit is expected to be 14.5 per cent in 2010-11, which has been slightly cut from 15.0 per cent in the last survey.
Further, exports are now expected to contract by 5 per cent in the current fiscal, down from the earlier view of (-)0.5 per cent. And, imports are expected to contract by 15.7 per cent, lower than (-)3.5 per cent in the last survey.
Net surplus under invisibles is placed higher at USD 83.1 billion in FY'10 against USD 80.9 billion in the last survey.
For the next five years, GDP is expected to grow at 7.5 per cent, unchanged from the previous survey, RBI said.
However, forecasters raised their estimate of inflation over the next five years to 5.5 per cent from earlier view of 5.3 per cent, the central bank said.