GDP growth to slow down to 4.8% in current fiscal: FICCI Survey
Updated: Jan 24, 2014 01:44:42pm
New Delhi, Jan 24 (KNN) Findings of FICCI’s latest economic outlook survey have pointed to continued signs of moderation in economic activity, indicating that GDP will slow down to 4.8 per cent in the current fiscal, marginally lower than the 5.0 per cent estimated by the last survey.
“However with regard to quarterly growth, the participating economists’ expect Q3 FY14 GDP growth to be slightly better at 5.0 per cent compared to 4.8 per cent growth clocked in Q2 FY14,” a press release said.
Economists’ outlook for industrial sector remained weak for the current fiscal owing to persistent weak demand and lukewarm investments.
“The Index of Industrial Production (IIP) is estimated to grow by 1.5 per cent in FY14 below than 1.7 per cent projection in the previous survey round. On the inflation front, economists have revised their projection upward to 6.5 per cent for FY14 from 6.0 per cent projected in the last survey due to rising food and fuel prices,” it said.
On the external front, the situation has improved discernibly and the estimated CAD to GDP ratio has been revised downwards.
“The ratio is estimated at 1.9 per cent for Q3 FY14, much lower than 4.5 per cent estimated in the previous round. Further, it is projected at 3.0 per cent for the year 2013-14 lower than the revised PMEAC target of 3.8 per cent. To carry forward this impetus and to keep CAD within manageable levels, exports need to grow at near double digits for the coming months, felt the participating economists’,” the release added.
On the policy announcement, participating economists’ have foreseen the key policy rate to adjust at 8.0 per cent, hinting towards a rise by 25 bps in January 2014.
With regard to outlook on Rupee value, participating economists felt that the corrective measures taken by RBI and government ensured that free fall in Rupee was curbed.
Participating economists’ said that at present Rupee value is hovering around its fair value and is expected to remain below 65 against dollar till end March 2014. Even with the recent tapering announced by US, the Rupee value remained stable. With continuous equity inflows coming from the foreign institutional investors and buildup of the foreign exchange reserves, the Rupee value will remain stable.
FICCI also asked the participating economists’ to highlight the key reforms that need to be carried out to elevate the growth trajectory. A majority of the economist pointed towards the implementation of Goods and Services Tax (GST), reforms in fuel and gas pricing and a further push to banking reforms.
The survey was conducted in November-December 2013 and drew responses from leading economists primarily from the banking and financial services sector. The economists were asked to provide their forecast for key macro-economic variables for the year 2013-14. FICCI also sought their views on RBI’s policy stance, sustainability of exports growth, volatility of Rupee value and the key reform priorities going ahead. (KNN/ES)
“However with regard to quarterly growth, the participating economists’ expect Q3 FY14 GDP growth to be slightly better at 5.0 per cent compared to 4.8 per cent growth clocked in Q2 FY14,” a press release said.
Economists’ outlook for industrial sector remained weak for the current fiscal owing to persistent weak demand and lukewarm investments.
“The Index of Industrial Production (IIP) is estimated to grow by 1.5 per cent in FY14 below than 1.7 per cent projection in the previous survey round. On the inflation front, economists have revised their projection upward to 6.5 per cent for FY14 from 6.0 per cent projected in the last survey due to rising food and fuel prices,” it said.
On the external front, the situation has improved discernibly and the estimated CAD to GDP ratio has been revised downwards.
“The ratio is estimated at 1.9 per cent for Q3 FY14, much lower than 4.5 per cent estimated in the previous round. Further, it is projected at 3.0 per cent for the year 2013-14 lower than the revised PMEAC target of 3.8 per cent. To carry forward this impetus and to keep CAD within manageable levels, exports need to grow at near double digits for the coming months, felt the participating economists’,” the release added.
On the policy announcement, participating economists’ have foreseen the key policy rate to adjust at 8.0 per cent, hinting towards a rise by 25 bps in January 2014.
With regard to outlook on Rupee value, participating economists felt that the corrective measures taken by RBI and government ensured that free fall in Rupee was curbed.
Participating economists’ said that at present Rupee value is hovering around its fair value and is expected to remain below 65 against dollar till end March 2014. Even with the recent tapering announced by US, the Rupee value remained stable. With continuous equity inflows coming from the foreign institutional investors and buildup of the foreign exchange reserves, the Rupee value will remain stable.
FICCI also asked the participating economists’ to highlight the key reforms that need to be carried out to elevate the growth trajectory. A majority of the economist pointed towards the implementation of Goods and Services Tax (GST), reforms in fuel and gas pricing and a further push to banking reforms.
The survey was conducted in November-December 2013 and drew responses from leading economists primarily from the banking and financial services sector. The economists were asked to provide their forecast for key macro-economic variables for the year 2013-14. FICCI also sought their views on RBI’s policy stance, sustainability of exports growth, volatility of Rupee value and the key reform priorities going ahead. (KNN/ES)
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