Survey of Professional Forecasters (PF) India

Professional forecasters expect growth to firm up and core inflation to stay above 5% mark.

Published bi-monthly by RBI since June 2014 (28th Round). Updated till September 2019 (55th Round). (Published on December 5th, 2018)

Recent Data Trend

According to the 55th round of Professional Forecasters (PF) survey, the real GDP is likely to grow at 7.4% year-on-year (YoY) in FY19 (Apr'18-Mar'19) up from the 6.7% YoY in FY18. The PF expects the growth to further accelerate in 2019-20 to 7.5% YoY. The growth-pickup is expected on the back of higher private consumption, as per the 28 forecasters surveyed by the RBI.

The industry and agricultural sector are expected to accelerate economic activity in the country with a growth of 7.3% YoY, 3.7% YoY, respectively in 2018-19. There was no change with regard to services sectors improvement (8% YoY for FY20).

On the inflation front, the PF expects the headline inflation to decline to 3.1% YoY in Q3 2018-19 and the headline inflation to remain above 4% in Q2 2019-20. However, the projections of risks to inflation as indicated by core inflation persists. The PF expects the core inflation to decline but will stay above 5% until Mar'19. The core CPI inflation is expected to fall from 6% YoY in Q3 2018-19 to around 5.8% YoY in Q4 2018-19.

With regards to the external sector, the PF lowered the export growth projections to 10.6% YoY for 2018-19 while increasing the import growth projections by 0.9 percentage points to 14.5% YoY for 2018-19. Consequently, it expects the current account deficit (CAD) to soar to 2.7% of GDP in 2018-19, from the 2.4% of GDP level at present.

In our view, with risks to fiscal slippage mounting (fiscal deficit at 3.5% of GDP by end-Oct'18), households pessimism about current economic conditions worsening, and a slowdown in growth rate (Real GDP growth slowed done to 7.1% in Q2 FY19), pressure continues to mount for the current government in its last year of the 5-year term.

Brief Overview

Survey of Professional Forecasters on Macroeconomic Indicators represents views of independent professional forecasters on major macroeconomic indicators of short term to medium term economic developments. RBI has been conducting the survey since September 2007 on a quarterly basis and on a bi-monthly basis since June 2014. Forecasters affiliated with institutions that conduct regular research on the Indian economy, including investment banks and credit rating agencies, are invited to participate in this survey. It is done through a questionnaire responded by approx 25-30 forecasters/ panellists in each survey. The survey covers component-wise detailed forecasts of GDP growth, inflation, capital formation, consumption, expenditure, export, import, etc and is summarised in terms of their median forecasts, along with quarterly paths for key variables.

For more information, please visit the official government website.

Next Release Date: February 5th, 2019