Survey slashes FY '13 GDP outlook to 5.7%

Reflecting the continued slide in the economy and a bleak future, the latest Professional Forecasters Survey by the Reserve Bank of India (RBI), a part of the RBI’s Macroeconomic Outlook, has lowered the median GDP growth estimate for fiscal 2013 to 5.7 per cent, down from 6.5 per cent estimated in a similar forecast made in July this year.

Simultaneously, the apex bank has upped the inflation rate from 7.3 per cent to 7.7 per cent and estimated export growth to stay flat this year, far below the 12 per cent it had projected earlier. The exchange rate has been pegged at Rs 52 to a US dollar, up from Rs 53 earlier.

A discomforting aspect of the survey is that it has painted an equally bleak picture for fiscal 2014, with GDP growth at 6.6 per cent (7 per cent earlier), inflation 6.7 per cent (6.8 per cent) and export growth at 12 per cent (17 per cent).

Further, it guided fiscal deficit for 2012-13 at 5.7 per cent (5.5 per cent earlier) and 5.3 per cent (5.1 per cent earlier) for 2013-14.

The silver lining is the estimation that growth in the third and fourth quarters will witness gradual recovery, which contradicts the general subdued mood among consumers as reflected in the “Consumer Confidence Survey” last month.