New Delhi: Economists believe that GDP in 2014-15 will grow at a faster pace to clock 5.5 per cent, according to a survey. The participating economists expect the industrial sector to also recover in the next fiscal with an estimated growth of 3.3 per cent, as per a poll done by apex industry chamber.
The forecast for agriculture and services sector growth in 2014-15 have been placed at 3.3 per cent and 7 per cent respectively. The GDP growth is expected to recover to 5.2 percent in the first quarter (Q1) of 2014-15.
On the inflation front, the respondents felt that both headline inflation and retail prices would remain range bound going ahead. Wholesale Price Index (WPI) is expected to stay around 5.5 per cent in 2014-15 and consumer price index (CPI) at about 7.9 per cent during the same period.
The participating economists were also asked for their views on the likely stance of Reserve Bank of India (RBI) in the forthcoming monetary policy due on April 1, 2014. A majority of respondents said that the Central Bank would keep rates unchanged in the policy announcement on April 1, 2014, said FICCI. However, they added that the RBI will continue its close vigil on inflation numbers.
“The current moderation in WPI and CPI is largely due to a drop in food prices. RBI would closely monitor core inflation numbers which still remain high,” said FICCI.
Furthermore, the median forecast for fiscal deficit as a percent of GDP stands at 4.4 per cent for 2014-15, said Ficci. This is higher than the 4.1 per cent estimate announced in the interim budget recently. The subsidy burden continues to be a bothering factor and can lead to fiscal slippages according to the economists polled by FICCI.
“In fact, majority of participating economists in the survey felt that the government was able to lower the deficit in 2013-14 due to a sizeable reduction in planned expenditure, rolling over of subsidy payments and a higher amount of dividend payments recovered from public sector enterprises. They indicated that there has hardly been any improvement on the revenue side,” said the industry chamber.
