Growth is expected to firm up in 2018-19 and 2019-20 on the back of private consumption. Consumer price inflation is expected to decline in Q3:2018-19 but firm up and remain above 4.0 per cent in the first half of 2019-20. The Reserve Bank has been conducting the Survey of Professional Forecasters (SPF) since September 2007. Twenty-six panellists participated in the 55th round of the survey conducted during November 20182. The survey results are summarised in terms of their median forecasts and consolidated in Annexes 1-7, along with quarterly paths for key variables. Highlights: 1. Output • Real gross domestic product (GDP) is likely to grow at 7.4 per cent in 2018-19 ― up from 6.7 per cent in 2017-18 ― and is expected to accelerate further by 10 basis points (bps) in 2019-20 on the back of support from private consumption (Table 1). • The investment rate, proxied by the ratio of gross fixed capital formation to GDP, is expected to improve in 2018-19 and 2019-20, commensurate with anupturn in the saving rate. • Real gross value added (GVA) is expected to grow by 7.2 per cent in 2018-19 and by 7.3 per cent in 2019-20, supported by activity in the industrial and services sectors.
| Table 1: Median Forecast of Growth in Real GDP, GVA and Components |
| (in per cent) |
| |
2018-19 |
2019-20 |
| Real GDP Growth |
7.4
(0.0) |
7.5
(0.0) |
Private Final Consumption Expenditure (nominal)
(growth rate in per cent) |
12.5
(+0.1) |
12.1
(-0.3) |
Gross Fixed Capital Formation Rate
(per cent of GDP) |
28.7
(-0.1) |
29.0
(-0.1) |
| Real GVA Growth |
7.2
(0.0) |
7.3
(0.0) |
| a. Agriculture and Allied Activities |
4.1
(+0.2) |
3.7
(+0.1) |
| b. Industry |
7.6
(-0.1) |
7.1
(-0.1) |
| c. Services |
7.9
(0.0) |
8.3
(-0.1) |
Gross Saving Rate
[per cent of gross national deposable income] (GNDI)] |
29.9
(+0.1) |
30.3
(+0.3) |
| Note: In all the tables, the figures in parentheses indicate the extent of revision in median forecasts (percentage points) relative to the previous SPF round. |
• Forecasters have assigned the maximum probability to GDP growth being in the range of 7.0-7.4 per cent in 2018-19 and 7.5-7.9 per cent in 2019-20 (Chart 1).
2. Inflation • Headline consumer price index (CPI) inflation is likely to decline to 3.1 per cent in Q3:2018-19 and increase thereafter. Headline inflation is expected at above 4.0 per cent in the first half of 2019-20. • Core inflation (i.e., CPI excluding food and beverages, pan, tobacco and intoxicants, and fuel and light) is likely to remain above 5.5 per cent during the second half of 2018-19 before edging down to 5.4 per cent in Q1:2019-20.
| Table 2: Median Forecast of Quarterly Inflation |
| (in per cent) |
| |
Q3:18-19 |
Q4:18-19 |
Q1:19-20 |
Q2:19-20 |
| CPI Headline |
3.1
(-1.0) |
4.0
(-0.5) |
4.5
(-0.5) |
4.6
(-0.5) |
| CPI excluding food & beverages, pan, tobacco & intoxicants and fuel & light |
6.0
(+0.4) |
5.8
(+0.5) |
5.4
(+0.4) |
5.4
(+0.4) |
| WPI All Commodities |
5.0
(+0.8) |
4.6
(+0.6) |
4.5
(+0.8) |
4.4
(+0.8) |
| WPI Non-food Manufactured Products |
4.8
(+0.2) |
4.2
(+0.3) |
4.1
(+0.5) |
4.0
(+0.7) |
• Forecasters have assigned the highest probability to CPI inflation being in the ranges of 3.0-3.4 per cent in Q3:2018-19, 3.5-3.9 per cent in Q4:2018-19 and 4.5- 4.9 per cent in Q1:2019-20 and Q2:2019-20 (Chart 2).
3. External Sector • The forecast of growth in merchandise exports and merchandise imports during 2018-19 have been revised up to 10.6 per cent and 14.5 per cent, respectively, but some deceleration is expected in 2019-20 (Table 3). • The current account deficit (CAD) is expected at 2.7 per cent and 2.6 per cent of GDP in 2018-19 and 2019-20, respectively. • The Indian rupee is likely to remain around ₹72 per US Dollar till Q2:2019-20 (Annex 3).
| Table 3: Median Forecast of Select External Sector Variables |
| |
2018-19 |
2019-20 |
Merchandise Exports – in US $ terms
(annual growth in per cent) |
10.6
(+0.2) |
8.9
(-0.8) |
Merchandise Imports– in US $ terms
(annual growth in per cent) |
14.5
(+0.2) |
10.4
(+2.0) |
Current Account Deficit
(Ratio to GDP at current market price, in per cent) |
2.7
(0.0) |
2.6
(+0.1) |
The Reserve Bank thanks the following institutions for their participation in this round of the Survey of Professional Forecasters (SPF):
Aditi Nayar (ICRA Limited); Arun Singh (Dun & Bradstreet India); Debopam Chaudhuri (Piramal Enterprises Limited); Devendra Kumar Pant (India Ratings and Research); Indranil Pan (IDFC Bank Ltd.); Nikhil Gupta (Motilal Oswal); PHD Research Bureau; Sameer Narang (Bank of Baroda); Shailesh Kejariwal (B&K Securities India Pvt Ltd); Siddharth V Kothari (Sunidhi Securities & Finance Ltd.); Upasna Bhardwaj (Kotak Mahindra Bank); STCI PD and TAC Economics.
The Bank also acknowledges the contribution of thirteen others SPF panellists, who prefer to remain anonymous. |
| Annex 1: Annual Forecasts for 2018-19 |
| Key Macroeconomic Indicators |
Annual Forecasts for 2018-19 |
| Mean |
Median |
Max |
Min |
1st quartile |
3rd quartile |
| 1 |
GDP at constant (2011-12) prices: Annual Growth (per cent) |
7.4 |
7.4 |
7.8 |
7.0 |
7.3 |
7.5 |
| 2 |
Private Final Consumption Expenditure (PFCE) at current prices: Annual Growth (per cent) |
12.3 |
12.5 |
13.2 |
11.2 |
11.8 |
12.8 |
| 3 |
Gross Fixed Capital Formation (GFCF) Rate (per cent of GDP at current market prices) |
28.6 |
28.7 |
29.0 |
27.7 |
28.3 |
29.0 |
| 4 |
GVA at basic prices at constant (2011-12) prices: Annual Growth rate (per cent) |
7.2 |
7.2 |
7.7 |
6.7 |
7.1 |
7.3 |
| a |
Agriculture & Allied Activities (growth rate in per cent) |
3.9 |
4.1 |
4.6 |
3.0 |
3.5 |
4.3 |
| b |
Industry (growth rate in per cent) |
7.6 |
7.6 |
9.8 |
6.0 |
7.0 |
8.0 |
| c |
Services (growth rate in per cent) |
7.9 |
7.9 |
8.6 |
7.1 |
7.7 |
8.1 |
| 5 |
Gross Saving Rate (per cent of Gross National Disposable Income) - at current prices |
29.4 |
29.9 |
32.1 |
23.4 |
29.4 |
30.2 |
| 6 |
Fiscal Deficit of Central Govt. (per cent of GDP at current market prices) |
3.3 |
3.3 |
3.5 |
3.2 |
3.3 |
3.4 |
| 7 |
Combined Gross Fiscal Deficit (per cent to GDP) |
6.2 |
6.2 |
7.0 |
5.9 |
6.0 |
6.3 |
| 8 |
Bank Credit - Scheduled commercial banks: Annual Growth (per cent) |
12.1 |
12.5 |
14.2 |
9.5 |
11.3 |
13.0 |
| 9 |
Yield on 10-Year G-Sec of Central Govt. (end-period) |
7.8 |
7.8 |
8.3 |
7.3 |
7.7 |
7.9 |
| 10 |
Yield on 91-day T-Bill of Central Govt. (end-period) |
6.9 |
6.9 |
8.1 |
6.2 |
6.7 |
7.2 |
| 11 |
Merchandise Exports - BoP basis (in US$ terms)- Annual Growth (per cent) |
10.6 |
10.6 |
15.0 |
6.3 |
9.4 |
11.7 |
| 12 |
Merchandise Imports - BoP basis (in US$ terms)- Annual Growth (per cent) |
14.3 |
14.5 |
20.0 |
11.1 |
12.5 |
15.2 |
| 13 |
Current Account Balance - Ratio to GDP at current market price (per cent) |
-2.7 |
-2.7 |
-2.2 |
-3.0 |
-2.8 |
-2.6 |
| 14 |
Overall BoP - In US $ bn. |
-16.6 |
-16.4 |
46.1 |
-65.0 |
-30.3 |
-6.6 |
| 15 |
Inflation based on CPI-Combined - Headline |
4.1 |
4.1 |
5.1 |
3.7 |
3.9 |
4.3 |
| 16 |
Inflation based on CPI-Combined - excluding 'Food & Beverages', 'Pan, Tobacco & Intoxicants' and 'Fuel & Light' |
5.8 |
5.9 |
6.1 |
4.6 |
5.8 |
6.0 |
| 17 |
Inflation based on WPI - All Commodities |
4.8 |
4.8 |
5.4 |
4.2 |
4.6 |
4.9 |
| 18 |
Inflation based on WPI -Non-food Manufactured Products |
4.4 |
4.5 |
5.1 |
2.8 |
4.3 |
4.7 |
| Annex 2: Annual Forecasts for 2019-20 |
| Key Macroeconomic Indicators |
Annual Forecasts for 2019-20 |
| Mean |
Median |
Max |
Min |
1st quartile |
3rd quartile |
| 1 |
GDP at constant (2011-12) prices: Annual Growth (per cent) |
7.5 |
7.5 |
8.1 |
6.4 |
7.3 |
7.6 |
| 2 |
Private Final Consumption Expenditure (PFCE) at current prices: Annual Growth (per cent) |
12.2 |
12.1 |
13.5 |
11.2 |
11.4 |
13.0 |
| 3 |
Gross Fixed Capital Formation (GFCF) Rate (per cent of GDP at current market prices) |
28.7 |
29.0 |
29.7 |
26.0 |
28.1 |
29.5 |
| 4 |
GVA at basic prices at constant (2011-12) prices: Annual Growth rate (per cent) |
7.3 |
7.3 |
7.9 |
6.8 |
7.2 |
7.5 |
| a |
Agriculture & Allied Activities (growth rate in per cent) |
3.6 |
3.7 |
4.7 |
2.2 |
3.0 |
4.2 |
| b |
Industry (growth rate in per cent) |
7.3 |
7.1 |
9.9 |
5.8 |
6.8 |
7.9 |
| c |
Services (growth rate in per cent) |
8.3 |
8.3 |
8.9 |
7.5 |
8.0 |
8.5 |
| 5 |
Gross Saving Rate (per cent of Gross National Disposable Income) - at current prices |
29.6 |
30.3 |
32.4 |
23.1 |
29.1 |
30.8 |
| 6 |
Fiscal Deficit of Central Govt. (per cent of GDP at current market prices) |
3.2 |
3.1 |
3.5 |
3.0 |
3.1 |
3.2 |
| 7 |
Combined Gross Fiscal Deficit (per cent to GDP) |
6.1 |
6.1 |
6.9 |
5.7 |
5.8 |
6.5 |
| 8 |
Bank Credit - Scheduled commercial banks: Annual Growth (per cent) |
13.0 |
13.0 |
15.9 |
11.6 |
11.8 |
13.5 |
| 9 |
Yield on 10-Year G-Sec of Central Govt. (end-period) |
7.7 |
7.8 |
8.0 |
7.2 |
7.5 |
7.9 |
| 10 |
Yield on 91-day T-Bill of Central Govt. (end-period) |
6.8 |
7.1 |
7.3 |
6.1 |
6.5 |
7.1 |
| 11 |
Merchandise Exports - BoP basis (in US$ terms)- Annual Growth (per cent) |
10.3 |
8.9 |
22.0 |
6.8 |
7.9 |
11.6 |
| 12 |
Merchandise Imports - BoP basis (in US$ terms)- Annual Growth (per cent) |
11.6 |
10.4 |
30.0 |
5.8 |
7.6 |
13.0 |
| 13 |
Current Account Balance - Ratio to GDP at current market price (per cent) |
-2.6 |
-2.6 |
-2.0 |
-3.0 |
-2.8 |
-2.4 |
| 14 |
Overall BoP - In US $ bn. |
3.7 |
5.0 |
49.2 |
-48.0 |
-3.0 |
11.0 |
| 15 |
Inflation based on CPI-Combined - Headline |
4.7 |
4.8 |
5.5 |
4.1 |
4.5 |
5.0 |
| 16 |
Inflation based on CPI-Combined - excluding 'Food & Beverages', 'Pan, Tobacco & Intoxicants' and 'Fuel & Light' |
5.1 |
5.1 |
6.0 |
4.4 |
4.6 |
5.5 |
| 17 |
Inflation based on WPI - All Commodities |
4.3 |
4.4 |
5.4 |
2.6 |
3.7 |
5.3 |
| 18 |
Inflation based on WPI -Non-food Manufactured Products |
3.7 |
4.0 |
5.1 |
2.3 |
2.8 |
4.4 |
| Annex 3: Quarterly Forecasts from Q3:2018-19 to Q2:2019-20 |
| Key Macroeconomic Indicators |
Quarterly Forecasts |
| Q3: 2018-19 |
Q4: 2018-19 |
| Mean |
Median |
Max |
Min |
Mean |
Median |
Max |
Min |
| 1 |
GDP at constant (2011-12) prices: Annual Growth (per cent) |
7 |
7 |
7.6 |
6.4 |
6.9 |
6.9 |
7.7 |
6.2 |
| 2 |
PFCE at current prices: Y-on-Y Growth (per cent) |
11.7 |
11.8 |
12.7 |
10.3 |
11.7 |
12 |
12.5 |
10.1 |
| 3 |
GFCF Rate (per cent of GDP at current market prices) |
28.8 |
28.8 |
31.9 |
27.3 |
29.2 |
29.4 |
32 |
27 |
| 4 |
GVA at constant (2011-12) prices: Annual Growth (per cent) |
6.9 |
6.9 |
7.7 |
6.3 |
6.7 |
6.7 |
7.6 |
6 |
| a |
Agriculture & Allied Activities (growth rate in per cent) |
3.5 |
3.7 |
5 |
1.7 |
3.4 |
3.1 |
5.1 |
2 |
| b |
Industry (growth rate in per cent) |
7 |
6.8 |
9.9 |
5 |
6.4 |
6.4 |
8.7 |
5 |
| c |
Services (growth rate in per cent) |
7.9 |
7.9 |
8.9 |
7.1 |
7.7 |
7.7 |
9.1 |
6.6 |
| 5 |
IIP (2011-12=100): Quarterly Average Growth (per cent) |
4.9 |
4.5 |
7.2 |
3.7 |
4.5 |
3.9 |
6.5 |
3.2 |
| 6 |
Merchandise Exports - BoP basis (in US$ bn.) |
84.4 |
84.5 |
90 |
81.1 |
87.3 |
87.1 |
93.5 |
80.8 |
| 7 |
Merchandise Imports - BoP basis (in US$ bn.) |
136.6 |
135 |
145 |
131.5 |
136.9 |
135.5 |
152.4 |
129 |
| 8 |
Rupee – US Dollar Exchange rate (RBI reference rate) (end-period) |
72.8 |
72 |
76 |
70.7 |
72.2 |
71.5 |
77 |
70 |
| 9 |
Crude Oil (Indian basket) price (US $ per barrel) (end-period) |
69.9 |
69.6 |
73 |
67 |
69.9 |
69 |
74 |
65 |
| 10 |
Repo Rate (end-period) |
6.50 |
6.50 |
6.50 |
6.50 |
6.54 |
6.50 |
6.75 |
6.50 |
| Key Macroeconomic Indicators |
Quarterly Forecasts |
| Q1: 2019-20 |
Q2: 2019-20 |
| Mean |
Median |
Max |
Min |
Mean |
Median |
Max |
Min |
| 1 |
GDP at constant (2011-12) prices: Annual Growth (per cent) |
7.2 |
7.2 |
7.8 |
6.5 |
7.5 |
7.4 |
8.1 |
6.7 |
| 2 |
PFCE at current prices: Y-on-Y Growth (per cent) |
11.9 |
12.2 |
12.9 |
10.5 |
12.2 |
12.1 |
13.6 |
10.8 |
| 3 |
GFCF Rate (per cent of GDP at current market prices) |
29.1 |
28.8 |
32.2 |
27.8 |
28.8 |
28.7 |
32.4 |
26.0 |
| 4 |
GVA at constant (2011-12) prices: Annual Growth (per cent) |
7.2 |
7.1 |
7.9 |
6.2 |
7.4 |
7.3 |
8.1 |
6.8 |
| a |
Agriculture & Allied Activities (growth rate in per cent) |
3.7 |
3.9 |
5.0 |
2.3 |
3.7 |
3.7 |
5.1 |
2.7 |
| b |
Industry (growth rate in per cent) |
6.9 |
6.9 |
9.1 |
4.8 |
7.3 |
7.3 |
9.6 |
5.4 |
| c |
Services (growth rate in per cent) |
8.1 |
8.1 |
8.9 |
7.3 |
8.1 |
8.0 |
8.8 |
7.3 |
| 5 |
IIP (2011-12=100): Quarterly Average Growth (per cent) |
5.5 |
5.7 |
6.5 |
4.0 |
5.5 |
5.4 |
7.1 |
4.0 |
| 6 |
Merchandise Exports - BoP basis (in US$ bn.) |
88.4 |
88.6 |
93.4 |
85.0 |
90.4 |
90.4 |
94.6 |
86.7 |
| 7 |
Merchandise Imports - BoP basis (in US$ bn.) |
140.0 |
140.4 |
149.2 |
132.8 |
142.3 |
142.4 |
150.2 |
134.6 |
| 8 |
Rupee – US Dollar Exchange rate (RBI reference rate) (end-period) |
72.2 |
71.8 |
78.0 |
69.7 |
71.9 |
71.3 |
78.5 |
68.9 |
| 9 |
Crude Oil (Indian basket) price (US $ per barrel) (end-period) |
69.6 |
69.0 |
75.0 |
63.0 |
68.2 |
68.0 |
75.0 |
60.0 |
| 10 |
Repo Rate (end-period) |
6.59 |
6.50 |
7.00 |
6.25 |
6.62 |
6.50 |
7.00 |
6.25 |
| Annex 4: Forecasts of CPI-Combined Inflation |
| (per cent) |
| |
CPI Combined Headline |
Core CPI Combined (excluding ‘Food & Beverages’, 'Pan, Tobacco & Intoxicants' and ‘Fuel & Light’) |
| Mean |
Median |
Max |
Min |
Mean |
Median |
Max |
Min |
| Q3:2018-19 |
3.4 |
3.1 |
5.0 |
2.7 |
6.1 |
6.0 |
6.7 |
5.6 |
| Q4:2018-19 |
4.1 |
4.0 |
5.7 |
3.2 |
5.8 |
5.8 |
6.5 |
5.1 |
| Q1:2019-20 |
4.6 |
4.5 |
6.0 |
3.9 |
5.4 |
5.4 |
6.3 |
4.6 |
| Q2:2019-20 |
4.7 |
4.6 |
5.5 |
3.9 |
5.4 |
5.4 |
6.4 |
4.5 |
| Annex 5: Forecasts of WPI Inflation |
| (per cent) |
| |
WPI Headline |
WPI Non-food Manufactured Products |
| Mean |
Median |
Max |
Min |
Mean |
Median |
Max |
Min |
| Q3:2018-19 |
4.9 |
5.0 |
5.4 |
4.4 |
4.9 |
4.8 |
5.6 |
4.4 |
| Q4:2018-19 |
4.9 |
4.6 |
6.5 |
4.0 |
4.2 |
4.2 |
5.2 |
3.2 |
| Q1:2019-20 |
4.5 |
4.5 |
5.9 |
3.5 |
3.9 |
4.1 |
4.9 |
2.6 |
| Q2:2019-20 |
4.3 |
4.4 |
5.8 |
2.6 |
3.7 |
4.0 |
5.1 |
2.1 |
| Annex 6: Mean probabilities attached to possible outcomes of Real GDP growth |
| Growth Range |
Forecasts for 2018-19 |
Forecasts for 2019-20 |
| 10.0 per cent or more |
0.00 |
0.00 |
| 9.5 to 9.9 per cent |
0.00 |
0.00 |
| 9.0 to 9.4 per cent |
0.00 |
0.00 |
| 8.5 to 8.9 per cent |
0.00 |
0.01 |
| 8.0 to 8.4 per cent |
0.04 |
0.09 |
| 7.5 to 7.9 per cent |
0.30 |
0.44 |
| 7.0 to 7.4 per cent |
0.54 |
0.36 |
| 6.5 to 6.9 per cent |
0.10 |
0.10 |
| 6.0 to 6.4 per cent |
0.01 |
0.01 |
| 5.5 to 5.9 per cent |
0.00 |
0.00 |
| 5.0 to 5.4 per cent |
0.00 |
0.00 |
| 4.5 to 4.9 per cent |
0.00 |
0.00 |
| 4.0 to 4.4 per cent |
0.00 |
0.00 |
| 3.5 to 3.9 per cent |
0.00 |
0.00 |
| 3.0 to 3.4 per cent |
0.00 |
0.00 |
| 2.5 to 2.9 per cent |
0.00 |
0.00 |
| 2.0 to 2.4 per cent |
0.00 |
0.00 |
| Below 2.0 per cent |
0.00 |
0.00 |
| Annex 7: Mean probabilities attached to possible outcomes of CPI (Combined) inflation |
| Inflation Range |
Forecasts for Q3:2018-19 |
Forecasts for Q4:2018-19 |
Forecasts for Q1:2019-20 |
Forecasts for Q2:2019-20 |
| 8.0 per cent or above |
0.00 |
0.00 |
0.00 |
0.00 |
| 7.5 to 7.9 per cent |
0.00 |
0.00 |
0.00 |
0.00 |
| 7.0 to 7.4 per cent |
0.00 |
0.00 |
0.00 |
0.00 |
| 6.5 to 6.9 per cent |
0.00 |
0.00 |
0.00 |
0.00 |
| 6.0 to 6.4 per cent |
0.00 |
0.00 |
0.00 |
0.00 |
| 5.5 to 5.9 per cent |
0.00 |
0.00 |
0.06 |
0.07 |
| 5.0 to 5.4 per cent |
0.00 |
0.05 |
0.12 |
0.24 |
| 4.5 to 4.9 per cent |
0.02 |
0.13 |
0.36 |
0.31 |
| 4.0 to 4.4 per cent |
0.08 |
0.24 |
0.31 |
0.27 |
| 3.5 to 3.9 per cent |
0.30 |
0.37 |
0.13 |
0.09 |
| 3.0 to 3.4 per cent |
0.47 |
0.18 |
0.02 |
0.02 |
| 2.5 to 2.9 per cent |
0.11 |
0.02 |
0.00 |
0.01 |
| 2.0 to 2.4 per cent |
0.01 |
0.00 |
0.00 |
0.00 |
| 1.5 to 1.9 per cent |
0.00 |
0.00 |
0.00 |
0.00 |
| 1.0 to 1.4 per cent |
0.00 |
0.00 |
0.00 |
0.00 |
| 0.5 to 0.9 per cent |
0.00 |
0.00 |
0.00 |
0.00 |
| 0 to 0.4 per cent |
0.00 |
0.00 |
0.00 |
0.00 |
| Below 0 per cent |
0.00 |
0.00 |
0.00 |
0.00 |
| 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. |
|
