The Reserve Bank has been conducting the Survey of Professional Forecasters (SPF) since September 2007. The responses for the 69th round of the survey were received during March 12-April 3, 2021, wherein thirty one panellists participated. The survey results are summarised in terms of their median forecasts (Annex 1-7), along with quarterly paths for key variables.

Highlights:

1. Output

• Real gross domestic product (GDP) is likely to contract by 7.5 per cent in 2020-21 but it is expected to recover and grow by 11.0 per cent next year; growth projection for 2020-21 has been revised up marginally while, for 2021-22, it has been revised up by 150 basis points (bps) from the last survey round (Table 1).

• GDP growth projections by the panellists are placed in the range of (-)8.7 to (-)7.0 per cent for 2020-21 and 7.9 to 15.2 per cent for 2021-22 (Annexes 1 and 2).

• Forecasters have assigned highest probability to real GDP growth lying between (-)8.0 to (-)7.6 per cent in 2020-21 (Chart 1). For 2021-22, highest probability has been assigned to the range 11.0 to 11.4 per cent (Chart 2).

Note: Tails of the distributions are not presented in Charts 1 and 2. Detailed probability distributions are given in Annex 6.

• Real private final consumption expenditure (PFCE) is expected to contract by 9.0 per cent during 2020-21, followed by an expansion of 12.0 per cent in the next year.
  

• Real gross fixed capital formation (GFCF) is projected to decline by 12.4 per cent in 2020-21 and then to grow by 13.4 per cent in 2021-22.

• Real gross value added (GVA) is expected to decline by 6.5 per cent in 2020-21; but is likely to record 10.0 per cent growth next year, supported by sharp pick-up in industrial and services activities.

• Real GDP is expected to grow (y-o-y) by 0.8 per cent in Q4:2020-21 and improve to 26.6 per cent in Q1:2021-22 driven by favourable base effect; growth is projected to moderate in the subsequent quarters (Table 2). Quarterly GDP growth forecast path has been revised up for Q1:2021-22 to Q3: 2021-22 from the previous round.

2.Inflation

• Headline consumer price index (CPI) inflation is expected at 4.9- 5.0 per cent during Q4:2020-21 to Q2:2021-22 and moderate thereafter to 4.3 per cent in Q3:2021-22 before increasing to 5.0 per cent in Q4:2021-22 (Table 3).

• CPI inflation excluding food and beverages, pan, tobacco and intoxicants and fuel and light, is expected at 5.6 per cent during Q4:2020-21 and likely to remain stable in the range of 5.3- 5.1 per cent for the subsequent four quarters.

• Forecasters have assigned the highest probability to CPI inflation lying in the range of 4.5-4.9 per cent up to Q2:2021-22; and 4.0-4.4 per cent in Q3:2021-22 (Chart 3).

Note: Tails of the distributions are not presented in the Chart. Detailed probability distributions are given in Annex 7.

3.External Sector

• Merchandise exports and imports are projected to decline by 10.3 per cent and 19.0 per cent, respectively, during 2020-21 before reverting to growth terrain in 2021-22 (Table 4).

• Current account is expected to record a surplus at 1.0 per cent (of GDP at current market prices) in 2020-21 before reverting to deficit at 0.8 per cent in 2021-22.

• The Indian rupee is likely to remain range bound between ₹73.20 – ₹74.20 per US dollar during 2021-22 (Annex 3).

Note: CPI: Consumer Price Index; GDP: Gross Domestic Products; GNDI: Gross National Disposable Income; GVA: Gross Value Added; IIP: Index of Industrial Production; WPI: Wholesale Price Index.

¹ The survey results reflect the respondents’ views, which are not necessarily shared by the Reserve Bank. Results of the previous survey round were released on the Bank’s website on February 5, 2021.