RBI survey pegs growth at 8.1 pc

A forecasters survey carried out by the RBI pegged real GDP growth for the current fiscal at 8.1 per cent, weaker than 8.9 per cent projected three months ago and the inflation between 5.5 and 5.9 per cent.

The third round of the survey, released by the RBI indicated that the real GDP growth in first and second quarter was projected at 8.1 and 8.3 per cent, respectively. During the third quarter of current financial year, the GDP growth is placed at 8.1 per cent. The forecasters saw lower chance (25 per cent) that WPI inflation would fall in the range 5-5.4 per cent against their earlier forecast of 38 per cent. The probability assigned to the range of 5.5 to 5.9 per cent has been revised upwards from 15 per cent in the earlier survey to 19.3 per cent in the current survey.
Median forecasts for real GDP originating from agriculture, industry and services sectors in first quarter of 2008-09 are kept at 3, 8.4 and 10 per cent, respectively. These projections were down from 3, 9 and 10.3 per cent, respectively, in the last survey. For the second quarter also, the sectoral growth forecasts have been revised downwards. For the third quarter of current financial year, the forecasters have kept the growth rates at 2.9, 8.6 and 9.8, respectively.

The survey was the third 'Survey of Professional Forecasters' on major macro-economic indicators of short to medium-term economic developments carried out by RBI to gain from the professional expertise and experience of these forecasters. The Reserve Bank has also introduced such a survey from the second quarter ended September 2007 covering component-wise detailed forecasts of GDP growth, inflation, savings, capital formation, consumption expenditure, export, import, interest rates, Forex reserve, money supply, credit growth, stock market movements and corporate profit.

Long-term forecasts for real GDP during the next five years is projected at 8.5 per cent and 8.9 per cent for the next 10 years. Over the next five years, the forecasters expect WPI inflation to be 5 per cent, which is revised upwards from the last survey. CPI-IW inflation will average to 5.5 per cent, same as expected in last survey. Over the next ten years, the WPI and CPI-IW-based inflation are expected to be 4.5 and 5 per cent, respectively.