Mumbai: The economy is expected to grow at a rate of 7.8 per cent in the current fiscal, a shade lower than earlier forecast of 7.9 per cent, says a survey sponsored by the Reserve Bank.
"Forecasters expect real Gross Value Added at basic price (GVA) to increase by 7.8 per cent in 2015-16. 'Agriculture and Allied Activities' and 'Services' are expected to grow by 2.2 per cent and 10 per cent, respectively," the survey of RBI-sponsored Professional Forecasters on Macroeconomic Indicators said.
The survey released in April had projected the GVA to increase by 7.9 per cent in 2015-16.
The professionals in the latest survey viewed that the 'industry' would grow by 6.2 per cent in the current fiscal.
The Gross Value Added (GVA) is a new concept introduced by the Central Statistics Office (CSO) to measure the economic activity. As per the CSO, it rose by 7.2 per cent in 2014-15 compared 6.6 per cent in the previous fiscal.
In 2016-17, the survey said that GVA is expected to increase by 8.2 per cent, led by growth in 'services' by 10.1 per cent.
"In terms of subjective probabilities assigned to growth projections, forecasters ascribed maximum 55 per cent chance that GVA growth in 2015-16 will be in the range of 7.5-7.9 per cent," the findings said.
For the year 2016-17, GVA growth in 8-8.4 per cent range is the most probable outcome, it added.
It further said the private final consumption expenditure at current prices is expected to increase by 12.7 per cent in 2015-16 and further by 13.1 per cent next year.
The gross saving rate is projected at 30.8 per cent of Gross National Disposable Income (GNDI) in 2015-16 and 31 per cent of GNDI in the next fiscal.
As per the survey, the central government's gross fiscal deficit (GFD) is projected at 3.9 per cent of GDP in 2015-16 and is expected to moderate to 3.5 per cent in the following year.
The combined GFD of Central and State Governments is projected at 6.5 per cent of GDP in 2015-16 and is expected to improve to 6.2 per cent of GDP in 2016-17.
It further said that both money supply and bank credit growth expectations declined for 2015-16 in the latest round of survey. While money supply (M3) is expected to increase by 12.5 per cent in 2015-16, bank credit is expected to expand by 13.5 per cent.
Merchandise exports growth is estimated at 1.2 per cent in 2015-16 and to improve to 6.2 per cent in 2016-17.
"Current Account Deficit is projected at 1 per cent and 1.3 per cent (of GDP) in 2015-16 and 2016-17, respectively," the survey added.
Forecasters assigned maximum probability of 70 per cent that retail inflation will be in the range 5-5.9 per cent in March 2016. Based on this probability distribution, the implicit CPI inflation rate for March 2016 is expected at 5.6 per cent.