RBI survey sees lower GDP growth, higher corporate profits

The quarterly Survey of Professional Forecasters conducted by the Reserve Bank of India (RBI) revised India's gross domestic product growth downwards to 6 per cent for 2009-10 from 6.5 per cent in the previous round of the survey. However, the survey has estimated that corporate profits are set to rise in the current fiscal.

According to the RBI, the highest probability of 37.5 per cent is assigned to growth range of 6.0-6.4 per cent for the year 2009-10. For the year 2010-11, they have assigned highest probability of 49.3 per cent to 7.5-7.9 per cent growth range for GDP. The forecasters also assigned a highest 34.3 percent chance for inflation to be within 6-6.9 per cent in 2009-10, the survey showed.

It said the profit growth of corporate sector in 2009-10 has been revised upwards to 10.0 per cent from 7.5 per cent in the last survey. "The growth in profit is expected to be 14.5 per cent in 2010-11, which has been revised marginally downwards from 15.0 per cent in the last survey," the RBI survey said.

The RBI released the results of the ninth round of survey on Monday, adding that the result in no way reflects the views of the central bank. The central bank polled 21 respondents for the survey which included macro-economic parameters like GDP, inflation, interest rates, money supply and credit growth.

The RBI in its mid-term monetary policy review had kept its GDP projection for the current fiscal unchanged at 6 per cent but had increased inflation target to 6.5 per cent by end-March 2010 from 5.0 per cent earlier.

The economists surveyed have sharply reduced their expectation for agriculture growth in 2009-10 to negative 1.4 per cent from 2.5 per cent projected in the previous round. "For industry, the forecasts have been revised upwards from 4.8 per cent to 6.3 per cent whereas for the services sector, there was modest downward revision from 8.3 per cent in the earlier survey to 8.1 per cent in the current survey," RBI said.

Source:Reuters