Growth is expected to firm up in 2018-19 and 2019-20 on the back of higher private consumption and investment. Consumer price inflation is expected to remain above 4.0 per cent from Q2:2018-19 to Q4:2018-19. The Reserve Bank has been conducting the Survey of Professional Forecasters (SPF) since September 2007. Twenty-five panellists participated in the 53rd round of the survey conducted during July 20182. The survey results are summarised in terms of their median forecasts and consolidated in Annexes 1-8, 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 i.e., by 20 basis points (bps) in 2019-20 on the back of support from private consumption and investment (Table 1). • The investment rate, proxied by gross fixed capital formation, is expected to improve in 2018-19 and further in 2019-20, commensurate with an upturn in the saving rate. • Real gross value added (GVA) is expected to grow by 7.2 per cent in 2018-19 and by 7.4 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) |
7.6
(0.0) |
Private Final Consumption Expenditure (nominal)
(growth rate in per cent) |
11.6
(+0.6) |
11.8
(+0.5) |
Gross Fixed Capital Formation Rate
(per cent of GDP) |
29.0
(0.0) |
29.5
(+0.3) |
| Real GVA Growth |
7.2
(+0.1) |
7.4
(0.0) |
| a. Agriculture and Allied Activities |
3.4
(+0.4) |
3.0
(0.0) |
| b. Industry |
6.9
(+0.1) |
7.0
(+0.2) |
| c. Services |
8.2
(-0.1) |
8.6
(0.0) |
Gross Saving Rate
[per cent of gross national deposable income (GNDI)] |
30.0
(0.0) |
30.5
(0.0) |
| 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 remain above 4.0 per cent till Q1:2019-20. • Core inflation (i.e., CPI excluding food and beverages, pan, tobacco and intoxicants, and fuel and light) is likely to remain above 5.0 per cent during 2018-19.
| Table 2: Median Forecast of Quarterly Inflation |
| (in per cent) |
| |
Q2:18-19 |
Q3:18-19 |
Q4:18-19 |
Q1:19-20 |
| CPI Headline |
4.7
(-0.2) |
4.3
(-0.1) |
4.8
(+0.2) |
5.1 |
| CPI excluding food & beverages, pan, tobacco & intoxicants and fuel & light |
6.1
(+0.2) |
5.6
(+0.1) |
5.3
(+0.1) |
4.9 |
| WPI All Commodities |
5.1
(+0.8) |
4.3
(+0.7) |
4.2
(+1.0) |
4.0 |
| WPI Non-food Manufactured Products |
4.9
(+0.9) |
4.5
(+1.1) |
4.0
(+1.6) |
2.6 |
• Forecasters have assigned the highest probability to CPI inflation being in the range 4.5-4.9 per cent in Q4:2018-19 as well as in Q4:2019-20 (Chart 2).
3. External Sector • The forecast of growth in merchandise exports and merchandise imports during 2018-19 have been revised up significantly to 9.8 per cent and 13.0 per cent, respectively, but some deceleration is expected in 2019-20 (Table 3). • The current account deficit (CAD) is expected to remain at around 2.5 per cent of GDP in 2018-19 and 2019-20. • The Indian rupee is likely to remain stable against the US dollar till Q4:2018-19 (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) |
9.8
(+1.7) |
8.4
(0.0) |
Merchandise Imports– in US $ terms
(annual growth in per cent) |
13.0
(+0.5) |
8.6
(+0.1) |
Current Account Deficit
(Ratio to GDP at current market price, in per cent) |
2.5
(+0.1) |
2.5
(+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; Anubhuti Sahay, Standard Chartered Bank; CRISIL Ltd; Debopam Chaudhuri, Piramal Enterprises Limited; Gaurav Kapur, IndusInd Bank Ltd.; ICICI Securities PD; Indranil Pan, IDFC Bank Ltd.; Nikhil Gupta, Motilal Oswal; Pinaki M. Mukherjee, Maruti Suzuki; Sameer Narang, Bank of Baroda; Shailesh Kejariwal, B&K Securities India Pvt Ltd; and Siddharth V Kothari, Sunidhi Securities & Finance Ltd.
The Bank also acknowledges the contribution of 13 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) |
7.3 |
7.4 |
7.8 |
6.9 |
7.2 |
7.5 |
| 2 |
Private Final Consumption Expenditure (PFCE) at current prices: Annual Growth (per cent) |
11.4 |
11.6 |
12.3 |
10.3 |
10.7 |
12.0 |
| 3 |
Gross Fixed Capital Formation (GFCF) Rate (per cent of GDP at current market prices) |
28.9 |
29.0 |
30.0 |
26.5 |
28.9 |
29.4 |
| 4 |
GVA at basic prices at constant (2011-12) prices: Annual Growth rate (per cent) |
7.2 |
7.2 |
7.7 |
6.7 |
7.0 |
7.3 |
| a |
Agriculture & Allied Activities (growth rate in per cent) |
3.5 |
3.4 |
4.4 |
2.8 |
3.0 |
4.0 |
| b |
Industry (growth rate in per cent) |
7.0 |
6.9 |
8.1 |
4.9 |
6.4 |
7.6 |
| c |
Services (growth rate in per cent) |
8.2 |
8.2 |
9.1 |
7.3 |
7.8 |
8.4 |
| 5 |
Gross Saving Rate (per cent of Gross National Disposable Income) - at current prices |
29.7 |
30.0 |
32.1 |
27.7 |
28.7 |
30.1 |
| 6 |
Fiscal Deficit of Central Govt. (per cent of GDP at current market prices) |
3.4 |
3.3 |
3.7 |
3.2 |
3.3 |
3.5 |
| 7 |
Combined Gross Fiscal Deficit (per cent to GDP) |
6.1 |
6.1 |
6.6 |
5.7 |
6.0 |
6.3 |
| 8 |
Bank Credit - Scheduled commercial banks: Annual Growth (per cent) |
11.1 |
11.3 |
15.0 |
8.0 |
9.8 |
12.0 |
| 9 |
Yield on 10-Year G-Sec of Central Govt. (end-period) |
7.8 |
7.7 |
8.3 |
7.3 |
7.5 |
8.0 |
| 10 |
Yield on 91-day T-Bill of Central Govt. (end-period) |
6.6 |
6.6 |
6.9 |
6.2 |
6.5 |
6.8 |
| 11 |
Merchandise Exports - BoP basis (in US$ terms)- Annual Growth (per cent) |
9.8 |
9.8 |
17.3 |
2.0 |
9.0 |
11.7 |
| 12 |
Merchandise Imports - BoP basis (in US$ terms)- Annual Growth (per cent) |
13.6 |
13.0 |
20.7 |
9.6 |
12.0 |
15.3 |
| 13 |
Current Account Balance - Ratio to GDP at current market price (per cent) |
-2.5 |
-2.5 |
-2.0 |
-3.2 |
-2.7 |
-2.4 |
| 14 |
Overall BoP - In US $ bn. |
-0.4 |
-3.2 |
45.5 |
-25.6 |
-12.8 |
9.2 |
| 15 |
Inflation based on CPI-Combined - Headline |
4.7 |
4.7 |
5.2 |
4.0 |
4.5 |
4.9 |
| 16 |
Inflation based on CPI-Combined - excluding 'Food & Beverages', 'Pan, Tobacco & Intoxicants' and 'Fuel & Light' |
5.7 |
5.7 |
6.4 |
4.8 |
5.6 |
6.0 |
| 17 |
Inflation based on WPI - All Commodities |
4.4 |
4.5 |
5.1 |
2.9 |
4.2 |
4.6 |
| 18 |
Inflation based on WPI -Non-food Manufactured Products |
4.2 |
4.4 |
5.0 |
2.8 |
3.9 |
4.6 |
| 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 |
7.6 |
8.1 |
6.6 |
7.4 |
7.7 |
| 2 |
Private Final Consumption Expenditure (PFCE) at current prices: Annual Growth (per cent) |
12.0 |
11.8 |
13.3 |
11.0 |
11.5 |
12.5 |
| 3 |
Gross Fixed Capital Formation (GFCF) Rate (per cent of GDP at current market prices) |
29.3 |
29.5 |
30.4 |
27.0 |
29.2 |
29.8 |
| 4 |
GVA at basic prices at constant (2011-12) prices: Annual Growth rate (per cent) |
7.4 |
7.4 |
7.9 |
6.3 |
7.2 |
7.7 |
| a |
Agriculture & Allied Activities (growth rate in per cent) |
3.2 |
3.0 |
4.7 |
1.2 |
2.9 |
3.7 |
| b |
Industry (growth rate in per cent) |
7.1 |
7.0 |
8.2 |
5.8 |
6.6 |
7.6 |
| c |
Services (growth rate in per cent) |
8.4 |
8.6 |
9.5 |
7.6 |
8.1 |
8.7 |
| 5 |
Gross Saving Rate (per cent of Gross National Disposable Income) - at current prices |
30.1 |
30.5 |
32.4 |
27.4 |
29.1 |
30.7 |
| 6 |
Fiscal Deficit of Central Govt. (per cent of GDP at current market prices) |
3.2 |
3.1 |
3.5 |
3.0 |
3.0 |
3.3 |
| 7 |
Combined Gross Fiscal Deficit (per cent to GDP) |
5.9 |
5.8 |
6.3 |
5.5 |
5.7 |
6.1 |
| 8 |
Bank Credit - Scheduled commercial banks: Annual Growth (per cent) |
12.1 |
12.3 |
15.0 |
8.0 |
11.5 |
13.9 |
| 9 |
Yield on 10-Year G-Sec of Central Govt. (end-period) |
7.6 |
7.6 |
8.3 |
7.0 |
7.4 |
8.0 |
| 10 |
Yield on 91-day T-Bill of Central Govt. (end-period) |
6.8 |
6.7 |
7.8 |
6.1 |
6.4 |
7.2 |
| 11 |
Merchandise Exports - BoP basis (in US$ terms)- Annual Growth (per cent) |
8.2 |
8.4 |
14.0 |
2.7 |
5.7 |
9.4 |
| 12 |
Merchandise Imports - BoP basis (in US$ terms)- Annual Growth (per cent) |
8.4 |
8.6 |
15.0 |
3.1 |
5.8 |
12.0 |
| 13 |
Current Account Balance - Ratio to GDP at current market price (per cent) |
-2.5 |
-2.5 |
-2.2 |
-3.1 |
-2.6 |
-2.4 |
| 14 |
Overall BoP - In US $ bn. |
6.7 |
8.0 |
25.0 |
-19.9 |
0.6 |
16.7 |
| 15 |
Inflation based on CPI-Combined - Headline |
4.7 |
4.7 |
5.2 |
4.5 |
4.5 |
5.0 |
| 16 |
Inflation based on CPI-Combined - excluding 'Food & Beverages', 'Pan, Tobacco & Intoxicants' and 'Fuel & Light' |
4.9 |
5.0 |
5.7 |
4.2 |
4.7 |
5.1 |
| 17 |
Inflation based on WPI - All Commodities |
4.0 |
4.2 |
5.0 |
2.4 |
3.7 |
4.5 |
| 18 |
Inflation based on WPI -Non-food Manufactured Products |
4.0 |
4.3 |
4.8 |
2.7 |
3.1 |
4.5 |
| Annex 3: Quarterly Forecasts from Q2:2018-19 to Q1:2019-20 |
| Key Macroeconomic Indicators |
Quarterly Forecasts |
| Q2: 2018-19 |
Q3: 2018-19 |
| Mean |
Median |
Max |
Min |
Mean |
Median |
Max |
Min |
| 1 |
GDP at constant (2011-12) prices: Annual Growth (per cent) |
7.5 |
7.5 |
8.1 |
7.0 |
7.1 |
7.2 |
7.8 |
6.3 |
| 2 |
PFCE at current prices: Y-on-Y Growth (per cent) |
10.4 |
11.1 |
12.7 |
7.0 |
10.4 |
11.2 |
12.2 |
6.5 |
| 3 |
GFCF Rate (per cent of GDP at current market prices) |
28.8 |
28.6 |
30.3 |
28.2 |
28.8 |
28.8 |
29.3 |
28.3 |
| 4 |
GVA at constant (2011-12) prices: Annual Growth (per cent) |
7.3 |
7.3 |
8.0 |
6.8 |
7.0 |
7.1 |
7.7 |
6.2 |
| a |
Agriculture & Allied Activities (growth rate in per cent) |
3.6 |
3.5 |
4.7 |
2.2 |
3.6 |
3.5 |
5.0 |
2.7 |
| b |
Industry (growth rate in per cent) |
6.7 |
6.8 |
7.9 |
4.9 |
6.8 |
6.7 |
8.7 |
5.0 |
| c |
Services (growth rate in per cent) |
8.2 |
8.1 |
9.0 |
7.4 |
8.1 |
8.2 |
9.3 |
6.9 |
| 5 |
IIP (2011-12=100): Quarterly Average Growth (per cent) |
5.0 |
5.2 |
6.1 |
4.0 |
4.2 |
4.5 |
6.0 |
2.4 |
| 6 |
Merchandise Exports - BoP basis (in US$ bn.) |
83.4 |
83.1 |
86.8 |
80.6 |
84.3 |
84.5 |
85.6 |
82.2 |
| 7 |
Merchandise Imports - BoP basis (in US$ bn.) |
127.6 |
127.6 |
135.3 |
120.6 |
135.2 |
136.0 |
141.2 |
130.1 |
| 8 |
Rupee – US Dollar Exchange rate (RBI reference rate) (end-period) |
68.3 |
68.5 |
70.0 |
64.5 |
68.5 |
68.8 |
72.0 |
65.5 |
| 9 |
Crude Oil (Indian basket) price (US $ per barrel) (end-period) |
74.1 |
73.4 |
77.8 |
72.0 |
74.3 |
73.5 |
81.3 |
70.2 |
| 10 |
Repo Rate (end-period) |
6.4 |
6.5 |
6.5 |
6.3 |
6.5 |
6.5 |
6.8 |
6.3 |
| Key Macroeconomic Indicators |
Quarterly Forecasts |
| Q4: 2018-19 |
Q1: 2019-20 |
| Mean |
Median |
Max |
Min |
Mean |
Median |
Max |
Min |
| 1 |
GDP at constant (2011-12) prices: Annual Growth (per cent) |
7.1 |
7.2 |
7.6 |
6.4 |
7.3 |
7.5 |
7.9 |
6.4 |
| 2 |
PFCE at current prices: Y-on-Y Growth (per cent) |
10.7 |
11.8 |
12.5 |
6.5 |
11.2 |
11.7 |
12.8 |
7.8 |
| 3 |
GFCF Rate (per cent of GDP at current market prices) |
29.3 |
29.4 |
30.0 |
28.4 |
29.9 |
30.1 |
30.7 |
29.1 |
| 4 |
GVA at constant (2011-12) prices: Annual Growth (per cent) |
7.0 |
7.0 |
7.5 |
6.2 |
7.2 |
7.3 |
7.7 |
6.2 |
| a |
Agriculture & Allied Activities (growth rate in per cent) |
3.3 |
3.4 |
4.5 |
1.9 |
3.2 |
3.0 |
4.7 |
1.7 |
| b |
Industry (growth rate in per cent) |
6.6 |
6.5 |
8.0 |
5.0 |
7.0 |
6.8 |
8.7 |
5.5 |
| c |
Services (growth rate in per cent) |
8.2 |
8.2 |
9.4 |
7.4 |
8.2 |
8.1 |
9.3 |
7.3 |
| 5 |
IIP (2011-12=100): Quarterly Average Growth (per cent) |
4.2 |
4.4 |
6.5 |
1.9 |
5.4 |
5.5 |
7.3 |
3.3 |
| 6 |
Merchandise Exports - BoP basis (in US$ bn.) |
87.7 |
87.9 |
90.7 |
84.7 |
86.3 |
85.5 |
90.7 |
82.2 |
| 7 |
Merchandise Imports - BoP basis (in US$ bn.) |
136.8 |
135.0 |
145.3 |
130.0 |
137.8 |
137.8 |
149.2 |
130.4 |
| 8 |
Rupee – US Dollar Exchange rate (RBI reference rate) (end-period) |
68.1 |
68.5 |
72.0 |
65.0 |
67.7 |
67.5 |
72.0 |
65.0 |
| 9 |
Crude Oil (Indian basket) price (US $ per barrel) (end-period) |
75.0 |
73.4 |
85.5 |
70.0 |
72.7 |
72.0 |
80.0 |
69.0 |
| 10 |
Repo Rate (end-period) |
6.6 |
6.5 |
6.8 |
6.5 |
6.6 |
6.5 |
6.8 |
6.5 |
| 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 |
| Q2:2018-19 |
4.7 |
4.7 |
5.1 |
4.1 |
6.1 |
6.1 |
6.6 |
5.7 |
| Q3:2018-19 |
4.4 |
4.3 |
5.1 |
3.8 |
5.7 |
5.6 |
6.5 |
5.2 |
| Q4:2018-19 |
4.8 |
4.8 |
5.9 |
4.3 |
5.3 |
5.3 |
6.6 |
5.0 |
| Q1:2019-20 |
5.1 |
5.1 |
6.0 |
4.3 |
5.0 |
4.9 |
6.1 |
4.3 |
| Annex 5: Forecasts of WPI Inflation |
| (per cent) |
| |
WPI Headline |
WPI Non-food Manufactured Products |
| Mean |
Median |
Max |
Min |
Mean |
Median |
Max |
Min |
| Q2:2018-19 |
4.9 |
5.1 |
5.4 |
4.3 |
4.7 |
4.9 |
5.2 |
2.8 |
| Q3:2018-19 |
4.4 |
4.3 |
5.2 |
3.8 |
4.5 |
4.5 |
5.5 |
2.7 |
| Q4:2018-19 |
4.3 |
4.2 |
5.1 |
3.6 |
3.8 |
4.0 |
5.0 |
2.6 |
| Q1:2019-20 |
3.9 |
4.0 |
4.8 |
3.2 |
2.8 |
2.6 |
4.1 |
2.2 |
| 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 |
0.01 |
0.03 |
| 8.0 to 8.4 per cent |
0.04 |
0.10 |
| 7.5 to 7.9 per cent |
0.22 |
0.40 |
| 7.0 to 7.4 per cent |
0.54 |
0.37 |
| 6.5 to 6.9 per cent |
0.19 |
0.09 |
| 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 Real GVA 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 |
0.01 |
0.01 |
| 8.0 to 8.4 per cent |
0.01 |
0.09 |
| 7.5 to 7.9 per cent |
0.13 |
0.35 |
| 7.0 to 7.4 per cent |
0.52 |
0.36 |
| 6.5 to 6.9 per cent |
0.29 |
0.18 |
| 6.0 to 6.4 per cent |
0.03 |
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 8: Mean probabilities attached to possible outcomes of CPI (Combined) inflation |
| Inflation Range |
Forecasts for Q4:2018-19 |
Forecasts for Q4:2019-20 |
| 8.0 per cent or above |
0.00 |
0.00 |
| 7.5 to 7.9 per cent |
0.00 |
0.00 |
| 7.0 to 7.4 per cent |
0.00 |
0.00 |
| 6.5 to 6.9 per cent |
0.00 |
0.00 |
| 6.0 to 6.4 per cent |
0.00 |
0.01 |
| 5.5 to 5.9 per cent |
0.03 |
0.06 |
| 5.0 to 5.4 per cent |
0.30 |
0.30 |
| 4.5 to 4.9 per cent |
0.45 |
0.40 |
| 4.0 to 4.4 per cent |
0.15 |
0.19 |
| 3.5 to 3.9 per cent |
0.05 |
0.04 |
| 3.0 to 3.4 per cent |
0.01 |
0.01 |
| 2.5 to 2.9 per cent |
0.00 |
0.00 |
| 2.0 to 2.4 per cent |
0.00 |
0.00 |
| 1.5 to 1.9 per cent |
0.00 |
0.00 |
| 1.0 to 1.4 per cent |
0.00 |
0.00 |
| 0.5 to 0.9 per cent |
0.00 |
0.00 |
| 0 to 0.4 per cent |
0.00 |
0.00 |
| Below 0 per cent |
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. |
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