Recently, the Reserve Bank of India published the results of the 83rd round of the Survey of Professional Forecasters. In the latest Survey, professional forecasters have mostly reiterated their previous estimates. The forecasters have assigned the highest probability of the real GDP growth remaining between 6.0% and 6.4% during FY24 and FY25. No significant acceleration is expected in the growth in FY25.
The FY24 growth is seen to be mostly front-ended, with the real GDP expected to grow (y-o-y) by 7.5% in Q1FY24 and thereafter moderate to 6.2% in Q2, 5.9% Q3, and further to 5.5% in Q4. The participants were quite sanguine about the price condition remaining under control with CPI inflation averaging 4.7% in FY25. The trade situation is expected to deteriorate further in FY24, before recovering in FY25. The trade deficit is likely to be close to 1.5% in FY24 as well as FY25. No significant improvement is expected in investment and savings rates.
The key highlights of the latest survey of professional forecasters are as follows:
Growth
The real GDP may grow by 6.1% in FY24 and 6.5% in FY25. The growth in FY24 would be mostly front-ended with 1QFY24 expected to record a growth of 7.5%.
Private Consumption is expected to grow 6.1% in FY24 and 6.4% in FY25.
Investment may grow at 7.1% in FY24 and 7.4% in FY25. The investment rate maybe 31.1% of GDP in FY24 and 31.5% in FY25
Gross Savings Rate is expected to be 29.8% of National Disposable Income in FY24 and 29.9% in FY25.
Fiscal Situation
The fiscal deficit of the central government is projected to be 5.9% for FY24 and 5.4% for FY25. Total gross fiscal deficit (center + states) is expected to be 8.7% and 8.2% for FY24 and FY25 respectively.
Benchmark 10-year bond yields are projected to average 7% in FY24 and 6.6% in FY25.
Trade and balance of payment
The current account balance is forecast to be negative US$52.6bn (1.4% of GDP) in FY24 and US$61.7bn (1.5% of GDP) in FY25.
Imports may contract by 5% in FY24 and grow by 7.8% in FY25.
Exports may Contract by 5.5% in FY24 and grow by 7% in FY25.
Overall balance of payment surplus is expected to be US$24.1 in FY24 and US$16bn in FY24
Inflation
The headline CPI inflation is likely to average 5.2% in FY24 and 4.7% in FY25.
The WPI inflation may average 0% in FY24 and 4% in FY25.
