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Date : Aug 04, 2015
Results of the Survey of Professional Forecasters on Macroeconomic Indicators – Round 35

The Reserve Bank has been conducting the Survey of Professional Forecasters since September 2007. The results of the survey represent the views of the respondent forecasters and in no way reflect the views or forecasts of the Reserve Bank of India.

Thirty one professional forecasters participated in the latest survey round (Round 35) conducted in July 2015. The results of the survey in tabular form are presented in the Annex.

Highlights

1. Annual Forecasts^

  • Forecasters expect real Gross Value Added at basic price (GVA) to increase by 7.6 per cent in 2015-16. ‘Agriculture & Allied Activities’ and ‘Services’ are expected to grow by 2.0 per cent and 9.7 per cent, respectively. ‘Industry’ growth forecast has been placed at 6.5 per cent (Table 1).

  • In 2016-17, GVA is expected to increase by 8.2 per cent, led by growth in ‘Services’ by 9.8 per cent.

  • In terms of subjective probabilities assigned to growth projections, forecasters ascribed maximum 50 per cent chance that GVA growth in 2015-16 will be in the range of 7.5-7.9 per cent (Chart 1). For the year 2016-17, GVA growth in 8.0-8.4 per cent range is the most probable outcome.

Table 1: Median Forecast of Real GVA (Growth Rate) for 2015-16 and 2016-17
  2015-16 2016-17
Real GVA 7.6
(-0.2)
8.2
(0.0)
Agriculture and Allied Activities 2.0
(-0.2)
3.0
(0.0)
Industry 6.5
(+0.3)
7.1
(+0.1)
Services 9.7
(-0.3)
9.8
(-0.3)
Note: 1. Growth rates are in per cent.
2. Figures in parentheses are change in forecasts from the previous survey round.

• Private final consumption expenditure at current prices is expected to increase by 12.0 per cent in 2015-16 and further by 12.9 per cent in 2016-17 (Table 2).

• Gross Saving Rate is projected at 30.7 per cent of Gross National Disposable Income (GNDI) in 2015-16 and 31.1 per cent of GNDI in 2016-17 (Table 2).

• Forecasters expect Gross Fixed Capital Formation Rate at 29.3 per cent of GDP in 2015-16, which is expected to improve to 30.0 per cent of GDP in 2016-17 (Table 2).

Table 2: Median Forecast of PFCE and Capital Formation
  2015-16 2016-17
Private final consumption expenditure (growth rate in per cent) 12.0
(-0.7)
12.9
(-0.2)
Gross Saving Rate (per cent of GNDI) 30.7
(-0.1)
31.1
(+0.1)
Gross Fixed Capital Formation Rate (per cent of GDP) 29.3
(+0.5)
30.0
(+0.6)

• Both money supply and bank credit growth expectations declined for 2015-16 in this round. While money supply (M3) is expected to increase by 12.3 per cent in 2015-16 and further by 14.0 per cent in 2016-17, bank credit is expected to expand by 13.1 per cent in 2015-16 and by 14.8 per cent in 2016-17 (Table 3).

Table 3: Median Forecast of Select Monetary and Banking Variables
  2015-16 2016-17
Money Supply (M3) 12.3
(-0.2)
14.0
(+0.5)
Bank Credit 13.1
(-0.4)
14.8
(+0.3)

• Central Government’s gross fiscal deficit (GFD) is projected at 3.9 per cent of GDP in 2015-16 and is expected to moderate to 3.5 per cent of GDP in 2016-17. The combined GFD of Central and State Governments is projected at 6.5 per cent of GDP in 2015-16 and is expected to improve to 6.1 per cent of GDP in 2016-17 (Table 4).

Table 4: Median Forecast of Fiscal Deficit
  2015-16 2016-17
Central Government Gross Fiscal Deficit (per cent of GDP) 3.9
(0.0)
3.5
(0.0)
Combined Gross Fiscal Deficit (per cent of GDP) 6.5
(0.0)
6.1
(-0.1)

• Merchandise exports are likely to grow marginally by 0.4 per cent in 2015-16 which constitutes a downward revision by 80 basis points (bps) from 1.2 per cent in the previous round. Growth of merchandise exports is expected to improve to 6.8 per cent in 2016-17 (Table 5).

• Current Account Deficit is projected at 1.2 per cent and 1.6 per cent (of GDP) in 2015-16 and 2016-17, respectively. Capital Account surplus is expected at 3.3 per cent of GDP in 2015-16 (Table 5).

Table 5: Median Forecast of Select External Sector Variables
  2015-16 2016-17
Merchandise Exports (growth rate in per cent) 0.4
(-0.8)
6.8
(+0.6)
Merchandise Imports (growth rate in per cent) -0.2
(-1.7)
10.1
(+1.1)
Current Account Balance (per cent of GDP) -1.2
(-0.2)
-1.6
(-0.3)
Capital Account Balance (per cent of GDP) 3.3
(-0.1)
3.2
(+0.3)

2. Quarterly Forecasts

• Real GVA growth at basic prices is expected to improve gradually from 7.2 per cent in Q1: 2015-16 to 8.2 per cent in Q1:2016-17 (Table 6).

Table 6: Median Forecast of Real GVA growth from Q1:2015-16 to Q1:2016-17
  Q1:15-16 Q2:15-16 Q3:15-16 Q4:15-16 Q1:16-17
Real GVA at basic prices 7.2
(-0.3)
7.6
(-0.1)
7.5
(-0.3)
7.9
(-0.1)
8.2
(-0.2)
Agriculture and Allied Activities 0.9
(-0.1)
1.8
(-0.2)
2.8
(-0.2)
3.0
(-0.4)
3.0
(0.0)
Industry 5.9
(+0.7)
6.4
(+0.4)
6.6
(0.0)
6.7
(+0.1)
7.5
(+0.5)
Services 9.5
(-0.5)
9.6
(+0.1)
9.8
(+0.4)
10.0
(+0.4)
9.9
(+0.1)

• CPI (Combined) headline inflation forecast has remained stable in the current round from the previous round. Headline inflation is expected to increase from 4.7 per cent in Q2:2015-16 to 5.6 per cent in Q1:2016-17 (Table 7).

• The forecasters expect core CPI (defined as excluding food and fuel) inflation to remain above 5.0 per cent from Q3:2015-16 (Table 7).

• WPI inflation is expected to cross 3.0 per cent in Q4:2015-16 (Table 7).

Table 7: Median Forecast of Inflation from Q2:2015-16 to Q1:2016-17
  Q2:15-16 Q3:15-16 Q4:15-16 Q1:16-17
CPI (Combined) headline 4.7
(0.0)
5.4
(+0.1)
5.7
(+0.1)
5.6
(+0.1)
Core CPI (Combined) (excluding food & fuel) 4.7
(+0.2)
5.3
(+0.2)
5.6
(-0.1)
5.3
(+0.1)
WPI headline -1.9
(0.0)
0.8
(0.0)
3.1
(+0.2)
3.2
(+0.2)

• Forecasters assigned maximum probability of 68 per cent (based on the average of individual forecasts) that CPI headline inflation will be in the range 5.0-5.9 per cent in March 2016 (Chart 2). Based on this probability distribution, the implicit CPI inflation rate for March 2016 is expected at 5.6 per cent. Similarly, for March 2017, the forecasters assigned maximum probability of 49 per cent that CPI inflation will be in the range of 5.0-5.9 per cent.

The Indian Rupee is expected to remain stable against the US Dollar. Indian Rupee is expected to remain within the range of ₹64.0 per US$ to ₹64.7 per US$ till Q1:2016-17 (Annex Table A.3).

3. Long Term Forecasts

• Over the next five and ten years, average real GVA growth is expected at 8.0 per cent and 8.4 per cent, respectively (Chart 3).

• The average CPI inflation forecast for the next five and ten years are expected at 5.0 per cent (Chart 4). The long-term inflation expectations have remained unchanged in the current round from the previous round.


Annex

Table A.1: Annual Forecasts for 2015-16
  Key Macroeconomic Indicators Annual Forecasts for 2015-16
Mean Median Max Min
1 Real GVA at basic prices (growth rate in per cent) 7.6 7.6 7.9 6.8
a Agriculture & Allied Activities (growth rate in per cent) 1.9 2.0 3.8 0.2
b Industry (growth rate in per cent) 6.4 6.5 7.6 4.0
c Services (growth rate in per cent) 9.8 9.7 11.6 9.0
2 Private Final Consumption Expenditure at current market price (growth rate in per cent) 11.7 12.0 14.0 7.8
3 Gross Saving (per cent of Gross National Disposable Income) 30.6 30.7 31.5 29.6
4 Gross Fixed Capital Formation (per cent of GDP) 29.2 29.3 30.1 28.1
5 Money Supply (M3) (growth rate in per cent) 12.6 12.3 16.8 10.8
6 Bank Credit of Scheduled Commercial banks (growth rate in per cent) 12.8 13.1 16.0 9.5
7 Combined Gross Fiscal Deficit (per cent of GDP) 6.4 6.5 7.0 6.0
8 Central Government Gross Fiscal Deficit (per cent of GDP) 3.9 3.9 4.1 3.5
9 Repo Rate(end period) 7.06 7.00 7.25 6.75
10 CRR (end period) 3.97 4.00 4.00 3.50
11 Yield of 91-Days Treasury Bills (end period) 7.5 7.4 8.0 7.3
12 YTM of Central Govt. Securities with term to maturity of 10-years (end period) 7.5 7.5 8.0 7.0
13 Overall Balance of Payments (in US $ bn.) 49.9 50.3 65.5 38.0
14 Merchandise Exports (in US $ bn.) 315.1 314.8 339.9 290.0
15 Merchandise Exports (growth rate in per cent) 0.3 0.4 5.8 -5.0
16 Merchandise Imports (in US $ bn.) 462.2 457.5 490.0 425.7
17 Merchandise Imports (growth rate in percent) 0.7 -0.2 8.0 -4.5
18 Merchandise Trade Balance (per cent of GDP) -6.7 -6.6 -5.8 -8.8
19 Net Invisible Balance (in US $ bn.) 122.7 121.3 160.0 110.0
20 Current Account Balance (in US $ bn.) -24.1 -23.0 -7.9 -34.0
21 Current Account Balance (per cent of GDP) -1.1 -1.2 -0.4 -1.6
22 Capital Account Balance (in US $ bn.) 73.7 74.0 96.9 55.3
23 Capital Account Balance (per cent of GDP) 3.3 3.3 4.4 2.5

Table A.2: Annual Forecasts for 2016-17
  Key Macroeconomic Indicators Annual Forecasts for 2016-17
Mean Median Max Min
1 Real GVA at basic prices (growth rate in per cent) 8.1 8.2 8.8 7.5
a Agriculture & Allied Activities (growth rate in per cent) 3.1 3.0 4.0 0.7
b Industry (growth rate in per cent) 7.2 7.1 8.6 6.2
c Services (growth rate in per cent) 10.0 9.8 13.0 8.9
2 Private Final Consumption Expenditure at current market price (growth rate in per cent) 12.8 12.9 14.9 11.5
3 Gross Saving (per cent of Gross National Disposable Income) 30.9 31.1 32.0 29.5
4 Gross Fixed Capital Formation (per cent of GDP) 29.8 30.0 31.2 27.7
5 Money Supply (M3) (growth rate in per cent) 13.8 14.0 16.8 11.1
6 Bank Credit of Scheduled Commercial banks (growth rate in per cent) 14.3 14.8 18.0 10.7
7 Combined Gross Fiscal Deficit (per cent of GDP) 6.1 6.1 7.0 5.6
8 Central Government Gross Fiscal Deficit (per cent of GDP) 3.5 3.5 3.9 3.0
9 Repo Rate(end period) 6.83 6.75 7.25 6.25
10 CRR (end period) 3.92 4.00 4.00 3.25
11 Yield of 91-Days Treasury Bills (end period) 7.2 7.3 7.8 6.6
12 YTM of Central Govt. Securities with term to maturity of 10-years (end period) 7.3 7.3 8.2 6.5
13 Overall Balance of Payments (in US $ bn.) 44.7 46.0 61.5 14.0
14 Merchandise Exports (in US $ bn.) 335.2 335.6 354.9 309.8
15 Merchandise Exports (growth rate in per cent) 7.5 6.8 11.9 4.6
16 Merchandise Imports (in US $ bn.) 503.3 499.6 560.0 454.6
17 Merchandise Imports (growth rate in per cent) 10.4 10.1 15.0 6.8
18 Merchandise Trade Balance (per cent of GDP) -6.9 -6.9 -5.6 -10.2
19 Net Invisible Balance (in US $ bn.) 130.9 126.5 195.0 120.0
20 Current Account Balance (in US $ bn.) -36.9 -39.7 -12.0 -55.0
21 Current Account Balance (per cent of GDP) -1.5 -1.6 -0.5 -2.2
22 Capital Account Balance (in US $ bn.) 76.4 80.0 95.0 14.5
23 Capital Account Balance (per cent of GDP) 3.3 3.2 4.3 2.5

Table A.3: Quarterly Forecasts from Q1:2015-16 to Q1:2016-17
  Key Macroeconomic Indicators Quarterly Forecasts
Q1: 2015-16 Q2: 2015-16
Mean Median Max Min Mean Median Max Min
1 Real GVA at basic prices (growth rate in per cent) 7.2 7.2 8.1 6.3 7.5 7.6 7.9 6.5
a Agriculture & Allied Activities (growth rate in per cent) 1.1 0.9 3.4 -1.5 1.7 1.8 3.8 0.0
b Industry (growth rate in per cent) 5.9 5.9 7.4 4.8 6.3 6.4 7.5 5.2
c Services (growth rate in per cent) 9.6 9.5 10.8 8.2 9.6 9.6 10.5 8.8
2 Index of Industrial Production(growth rate in per cent) 4.1 3.8 6.9 2.6 4.9 4.7 6.8 2.8
3 Private Final Consumption Expenditure (growth rate in per cent) 9.1 9.9 12.1 4.2 9.9 9.7 12.7 5.1
4 Gross Fixed Capital Formation (per cent of GDP) 29.6 29.5 31.6 28.0 29.6 29.4 31.4 28.1
5 ₹ per U.S. Dollar (RBI reference rate-end period) - - - - 64.21 64.00 65.58 63.00
6 Repo Rate (end period) - - - - 7.24 7.25 7.50 7.00
7 CRR (end period) - - - - 4.00 4.00 4.00 4.00
8 Merchandise Export (in US$ bn.) 71.6 71.6 79.5 66.7 78.2 79.1 82.0 69.6
9 Merchandise Import (in US$ bn.) 104.2 103.5 117.4 97.7 113.4 114.0 118.7 105.5
10 Indian Crude Oil basket Price (in US$ per barrel) - - - - 64.1 63.5 72.0 60.0

  Key Macroeconomic Indicators Quarterly Forecasts
Q3: 2015-16 Q4: 2015-16 Q1: 2016-17
Mean Median Max Min Mean Median Max Min Mean Median Max Min
1 Real GVA at basic prices (growth rate in per cent) 7.5 7.5 8.1 7.0 7.9 7.9 8.5 6.9 8.1 8.2 9.4 7.0
a Agriculture & Allied Activities (growth rate in per cent) 2.7 2.8 5.0 1.2 2.8 3.0 5.0 0.4 2.9 3.0 4.0 0.6
b Industry (growth rate in per cent) 7.0 6.6 9.3 6.0 6.6 6.7 8.1 5.7 7.2 7.5 8.7 6.0
c Services (growth rate in per cent) 9.8 9.8 13.2 7.8 10.2 10.0 13.5 8.5 10.2 9.9 13.0 8.5
2 Index of Industrial Production(growth rate in per cent) 5.3 5.0 8.2 2.2 4.7 4.8 6.5 2.1 5.3 5.1 7.1 3.9
3 Private Final Consumption Expenditure (growth rate in per cent) 11.0 11.8 14.6 5.3 10.6 11.0 13.8 5.6 11.3 12.1 15.1 6.0
4 Gross Fixed Capital Formation (per cent of GDP) 29.4 29.5 30.9 27.8 30.0 30.1 30.9 28.8 30.0 30.2 31.0 29.0
5 ₹ per U.S. Dollar (RBI reference rate-end period) 64.49 64.50 66.00 63.00 64.42 64.50 66.00 62.50 64.53 64.68 66.50 62.50
6 Repo Rate (end period) 7.18 7.25 7.50 7.00 7.09 7.00 7.25 7.00 7.05 7.00 7.25 6.75
7 CRR (end period) 4.00 4.00 4.00 4.00 3.98 4.00 4.00 3.75 3.98 4.00 4.00 3.75
8 Merchandise Export (in US$ bn.) 79.8 80.9 88.0 71.9 80.3 81.3 84.8 72.3 77.3 78.1 84.0 70.0
9 Merchandise Import (in US$ bn.) 120.1 120.0 132.3 110.6 117.1 117.3 130.2 100.0 117.9 117.6 134.2 103.9
10 Indian Crude Oil basket Price (in US$ per barrel) 66.6 65.0 80.0 63.0 68.3 66.0 85.0 60.0 70.4 66.0 90.0 62.0

Table A.4: Forecasts of CPI-Combined Inflation
  CPI Combined Headline Core CPI Combined
(excluding food & fuel)
Mean Median Max Min Mean Median Max Min
Q2:2015-16 4.8 4.7 7.2 3.8 4.7 4.7 5.5 4.2
Q3:2015-16 5.5 5.4 7.0 4.8 5.2 5.3 5.7 4.4
Q4:2015-16 5.7 5.7 6.9 5.0 5.6 5.6 6.0 4.8
Q1:2016-17 5.7 5.6 6.7 5.2 5.4 5.3 6.0 5.0

Table A.5: Forecasts of WPI Inflation
  WPI Headline WPI-Manufactured Products
Mean Median Max Min Mean Median Max Min
Q2:2015-16 -1.6 -1.9 2.1 -2.9 -0.3 -0.5 0.8 -0.7
Q3:2015-16 0.6 0.8 2.9 -2.4 0.5 0.7 1.0 -0.5
Q4:2015-16 2.8 3.1 4.8 -1.1 1.7 1.8 2.5 0.9
Q1:2016-17 3.0 3.2 5.7 -3.3 2.6 2.5 3.4 1.5

Table A.6: Mean probabilities attached to possible outcomes of real GVA growth
Growth Range Forecasts for 2015-16 Forecasts for 2016-17
Below 2.0 per cent 0 0
2.0 to 2.4 per cent 0 0
2.5 to 2.9 per cent 0 0
3.0 to 3.4 per cent 0 0
3.5 to 3.9 per cent 0 0
4.0 to 4.4 per cent 0 0
4.5 to 4.9 per cent 0 0
5.0 to 5.4 per cent 0 0
5.5 to 5.9 per cent 0 0
6.0 to 6.4 per cent 0.03 0
6.5 to 6.9 per cent 0.09 0.02
7.0 to 7.4 per cent 0.29 0.13
7.5 to 7.9 per cent 0.50 0.29
8.0 to 8.4 per cent 0.07 0.39
8.5 to 8.9 per cent 0.01 0.15
9.0 to 9.4 per cent 0 0.02

Table A.7: Mean probabilities attached to possible outcomes of CPI (Combined) inflation
Inflation Range Forecasts for March 2016 Forecasts for March 2017
Below 0 per cent 0 0
0 to 0.9 per cent 0 0
1.0 to 1.9 per cent 0 0
2.0 to 2.9 per cent 0 0.01
3.0 to 3.9 per cent 0.01 0.05
4.0 to 4.9 per cent 0.10 0.29
5.0 to 5.9 per cent 0.68 0.49
6.0 to 6.9 per cent 0.19 0.15
7.0 to 7.9 per cent 0.02 0.02
8.0 to 8.9 per cent 0 0
9.0 to 9.9 per cent 0 0
10.0 to 10.9 per cent 0 0
11.0 to 11.9 per cent 0 0
12.0 to 12.9 per cent 0 0
13.0 to 13.9 per cent 0 0
14.0 per cent or above 0 0

Table A.8: Mean probabilities attached to possible outcomes of WPI inflation
Inflation Range Forecasts for March 2016 Forecasts for March 2017
Below 0 per cent 0.01 0
0 to 0.9 per cent 0.06 0.01
1.0 to 1.9 per cent 0.18 0.13
2.0 to 2.9 per cent 0.31 0.19
3.0 to 3.9 per cent 0.23 0.29
4.0 to 4.9 per cent 0.12 0.30
5.0 to 5.9 per cent 0.07 0.06
6.0 to 6.9 per cent 0.01 0.02
7.0 to 7.9 per cent 0 0
8.0 to 8.9 per cent 0 0
9.0 to 9.9 per cent 0 0
10.0 to 10.9 per cent 0 0
11.0 to 11.9 per cent 0 0
12.0 to 12.9 per cent 0 0
13.0 to 13.9 per cent 0 0
14.0 per cent or above 0 0

Table A.9: Annual Average Percentage Change
  Annual average percentage change over the next five years Annual average percentage change over the next ten years
Mean Median Max Min Mean Median Max Min
Real GVA 8.0 8.0 10.0 7.0 8.3 8.4 10.0 7.0
CPI Combined 5.1 5.0 6.0 4.0 4.9 5.0 6.2 4.0
WPI 3.6 3.7 5.0 2.0 3.5 3.5 5.0 2.6

1 Data for the previous survey round were released on June 3, 2015 on the RBI website. The results of the survey represent the views of the respondent forecasters and in no way reflect the views or forecasts of the Reserve Bank of India.

^ Median of forecasts of the respondents.


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