Growth is likely to peak in the second quarter of the fiscal year 2017, according to the quarterly growth projections for the next five quarters. The growth projections was done as part of the survey of professional forecasters on macroeconomic indicators by the Reserve Bank of India (RBI).
The RBI pointed out that the results of the survey represent the views of the respondent forecasters and in no way reflect the views or forecasts of the central bank.
Forecasters expect real gross value added (GVA) at basic price to increase by 7.4% in 2015-16. The survey result pointed out that in 2016-17, GVA is expected to increase by 7.8%, led by growth in ‘services’ by 9.3%.
The long- term real GVA growth expectations moderated by 10 bps to 8.2% in the current round from 8.3% in the previous round. The medium-term growth forecast for the next five years remained unchanged at 8%.
The gross savings rate is projected at around 30% of gross national disposable income (GNDI) in 2015-16 and 2016-17.
CPI headline inflation is likely to remain below 6% till the third quarter of FY17, it indicated, while adding that the rupee is expected to remain stable against the US dollar in near future.
As far as long-term forecasts are concerned, the average CPI inflation for the next five years remained unchanged at 5%, while the long-term (ten years) inflation forecast increased to 4.8% from 4.7%.
The gross fiscal deficit (GFD) is projected at 3.9% of the GDP in 2015-16 and is expected to moderate to 3.7% of the GDP in 2016-17. The combined GFD of central and state governments is projected at 6.4% of the GDP in 2015-16 and is expected to improve to 6.2% of the GDP in 2016-17.
The current account deficit (CAD) is projected at 1.2% and 1.5% of the GDP in 2015-16 and 2016-17, respectively. Capital account surplus is expected at 2.4% of GDP in 2015-16.