A central bank-conducted survey predicted that the real Gross Domestic Product (GDP) growth in the second quarter of 2009-10 is projected at 6.2 per cent, same as in the last survey. During the third and fourth quarters of the current financial year, the GDP growth is placed at 5.7 per cent and 6.7 per cent, respectively.

For 2009-10, the forecast for agriculture growth has been revised downwards from 2.5 per cent to (-) 1.4 per cent. For industry, it has been revised upwards from 4.8 per cent to 6.3 per cent whereas for the services sector, there was a modest downward revision from 8.3 per cent in the earlier survey to 8.1 per cent in the current survey. Corporate profit in the second quarter of 2009-10 is expected to grow by 4.5 per cent, revised upwards from the earlier forecast of 3 per cent.

The Reserve Bank of India (RBI) on Monday released the results of quarterly Survey of Professional Forecasters on major macroeconomic indicators of medium-term economic developments. The RBI has been conducting the survey on a quarterly basis from the second quarter ended September 2007.

Forecasters’ median estimates for wholesale price index (WPI)-based inflation in the third and fourth quarters of the current financial year are 4 per cent and 6.8 per cent, respectively which have been revised upwards from 2.5 per cent and 5.4 per cent, respectively in the last survey. The forecasters were asked to assign the probabilities to the possibility that average WPI-based inflation during the current financial year and the next financial year would fall into various ranges. Forecasters have assigned highest 34.3 per cent chance that inflation will be in the range of 6-6.9 per cent in 2009-10 and highest 38.8 per cent chance that it will fall to 5-5.9 per cent in 2010-11.

Long-term forecast for real GDP for the next five years is 7.5 per cent, which remains the same as in the last survey. For the next ten years, the GDP is expected to grow at 7.8 per cent, revised downwards from 8 per cent in the last survey.

Over the next five years, the forecasters expect WPI inflation to be 5.5 per cent, which is revised upwards from 5.3 per cent. CPI-IW-based (consumer price index for industrial workers) inflation has also been revised slightly upwards to 6.5 per cent in this survey from 6 per cent in the last survey. Over the next ten years,

WPI and CPI-IW-based inflation rates are expected to be 4.8 per cent and 5.8 per cent, respectively.

The forecasters expect end-period repo rate and reverse repo rate to be 5 per cent and 3.5, respectively in 2009-10, same as expected in the last survey.

Exports are expected to contract by 5 per cent in the current financial year, revised downwards from (-) 5 per cent in the last survey. Imports are expected to contract by 15.7 per cent in 2009-10, revised further downwards from (-) 3.5 per cent in the last survey. Net surplus under invisibles is placed at $83.1 billion in 2009-10 against $80.9 billion in the previous survey.

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