RBI survey of analysts sees FY10 GDP at 6 pct

Tuesday November 17, 11:20 AM

MUMBAI (Reuters) - Economists and analysts surveyed by the Reserve Bank of India (RBI) revised downwards India's gross domestic product projection to 6.0 percent for 2009/10 from 6.5 percent in the previous round of survey.
The forecasters also assigned a highest 34.3 percent chance for inflation to be within 6.0-6.9 percent in 2009/10, the survey showed.
The RBI released the results of the ninth round of survey on Monday, adding that the result in no way reflects the views of the central bank.
The central bank polled 21 respondents for the survey which included macro-economic parameters like GDP, inflation, interest rates, money supply and credit growth.
The RBI in its mid-term monetary policy review had kept its GDP projection for the current fiscal unchanged at 6.0 percent but had increased inflation target to 6.5 percent by end-March 2010 from 5.0 percent earlier.
The economists surveyed have sharply reduced their expectation for agriculture growth in 2009/10 to -1.4 percent from 2.5 percent projected in the previous round.

"For industry, the forecasts have been revised upwards from 4.8 percent to 6.3 percent whereas for the services sector, there was modest downward revision from 8.3 percent in the earlier survey to 8.1 percent in the current survey," RBI said.

The study also showed that the economists expect the Jul-Sep GDP growth at 6.2 percent and for Oct-Dec and Jan-Mar at 5.7 percent and 6.7 percent respectively.

The government is scheduled to announce the Jul-Sep GDP growth number on Nov. 30.

The forecasters expect headline inflation to be at 4.0 percent in Oct-Dec and at 6.8 percent the following quarter.
Over the next five years, GDP is expected to grow at 7.5 percent, unchanged from the previous round of survey, RBI said.
But inflation forecast over the next five years, was revised upwards to 5.5 percent from 5.3 percent in the previous survey.
(Reporting by Suvashree Dey Choudhury; Editing by Sunil Nair)

Jaibeer says:
Although RBI has predicted the increase in inflaction and at the same time decrease GDP, this has a signal to increase in the interest rate in the near future, so this is the best time to invest in commodities and real estate.