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Date : Oct 09, 2020
Survey of Professional Forecasters on Macroeconomic Indicators– Results of the 66th Round

The Reserve Bank has been conducting the Survey of Professional Forecasters (SPF) since September 2007. The responses for the 66th round of the survey were received during September 15-30, 20202, wherein thirty three panellists participated. The survey results are summarised in terms of their median forecasts (Annex 1-7), along with quarterly paths for key variables.

Highlights:

1. Output

  • Real gross domestic product (GDP) is likely to contract by 9.1 per cent in 2020-21 but it is expected to recover next year, when it is expected to grow by 8.2 per cent (Table 1).

  • Real private final consumption expenditure (PFCE) is assessed to contract by 11.0 per cent during 2020-21, followed by an expansion of 8.5 per cent in the next year.

  • Real gross fixed capital formation (GFCF) is projected to record a large decline of 21.0 per cent in 2020-21; it is expected to grow by 10.0 per cent in 2021-22.

  • Forecasters have assigned highest probability to real GDP growth lying below (-)9.0 per cent in 2020-21 (Chart 1). For 2021-22, highest probability has been assigned to GDP growth lying in the wide range of 7.0-8.4 per cent (Chart 2).

  • Despite expansion in agricultural activities, real gross value added (GVA) is expected to decline by 8.4 per cent in 2020-21; it is likely to record 8.2 per cent growth next year, supported by improvements in industrial and services activities.

Table 1: Median Forecast of Growth in GDP, GVA and components
(in per cent)
  2020-21 2021-22
Real GDP growth rate -9.1
(-3.3)
8.2
(+0.8)
a. Real PFCE growth rate -11.0
(-5.0)
8.5
(+0.5)
b. Real GFCF growth rate -21.0
(-11.2)
10.0
(+3.2)
Nominal PFCE growth rate -6.9
(-4.4)
11.4
(+0.6)
Real GVA Growth -8.4
(-2.6)
8.2
(+1.2)
a. Agriculture and Allied Activities 3.7
(+0.3)
3.2
(-0.3)
b. Industry -13.0
(-3.3)
9.7
(+2.6)
c. Services -9.7
(-3.6)
9.1
(+0.9)
Gross Saving Rate
[per cent of gross national disposable income] (GNDI)]
26.0
(-2.0)
27.0
(-1.1)
Gross Capital Formation (GCF) Rate
[per cent of GDP at current market prices]
25.4
(-2.5)
27.7
(-0.7)
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.

Chart 1

Note: Tails of the distribution are not presented in the chart. Detailed probability distributions are given in Annex 6.

Chart 2

Note: Tails of the distribution are not presented in the chart. Detailed probability distributions are given in Annex 6.

Inflation

  • Headline consumer price index (CPI) inflation is expected at 6.6 per cent in Q2:2020-21, but moderate thereafter to 3.8 per cent by Q2:2021-22 (Table 2).

  • CPI inflation excluding food and beverages, pan, tobacco and intoxicants and fuel and light, is expected to rise to 5.6 per cent during Q3:2020-21 and moderate thereafter to 4.2 per cent by Q2:2021-22.
Table 2: Median Forecast of Quarterly Inflation
(in per cent)
  Q2:2020-21 Q3:2020-21 Q4:2020-21 Q1:2021-22 Q2:2021-22
CPI Combined (General) 6.6
(+1.4)
4.9
(+1.6)
4.2
(+1.2)
3.9
(+0.6)
3.8
CPI Combined excluding food and beverages, pan, tobacco and intoxicants and fuel and light 5.5
(+0.8)
5.6
(+1.0)
5.2
(+1.0)
4.7
(+1.0)
4.2
WPI All Commodities 0.0
(+0.6)
0.1
(+1.3)
0.3
(+1.0)
2.5
(0.0)
2.1
WPI Non-food Manufactured Products 0.4
(+0.3)
1.3
(+0.4)
1.2
(+0.6)
2.0
(0.0)
1.9
  • Forecasters have assigned the highest probability to CPI inflation lying in the range of 6.5-6.9 per cent in Q2:2020-21; 4.5-4.9 per cent in Q3:2020-21; 4.0-4.4 per cent in Q4:2020-21; and 3.5-4.4 per cent in Q1:2021-22 (Chart 3).
Chart 2 Probability Distributions

Note: Tails of the distribution are not presented in the chart. Detailed probability distributions are given in Annex 7.

2. External Sector

  • Merchandise exports and imports are projected to decline by 14.7 per cent and 22.7 per cent, respectively, during 2020-21 before reverting to growth terrain in 2021-22 (Table 3).

  • Current account is expected to record a surplus at 0.5 per cent (of GDP at current market prices) in 2020-21 before reverting to deficit at 0.6 per cent in 2021-22.

  • The Indian rupee is likely to remain range bound within ₹73.00 - ₹73.70 per US dollar till Q2:2021-22 (Annex 3).

Table 3: Median Forecast of Select External Sector Variables
  2020-21 2021-22
Merchandise Exports in US $ terms
(annual growth in per cent)
-14.7
(-0.1)
10.2
(+0.2)
Merchandise Imports in US $ terms
(annual growth in per cent)
-22.7
(-2.6)
20.6
(+4.1)
Current Account Balance
(per cent of GDP at current market prices)
0.5
(+0.1)
-0.6
(0.0)

The Reserve Bank thanks the following panellists for their participation in this round of the Survey of Professional Forecasters (SPF):

Aditi Nayar (ICRA Limited); CRISIL Ltd.; DBS Bank; Debopam Chaudhuri (Piramal Enterprises Limited); Devendra Kumar Pant (India Ratings and Research); Gaurav Kapur (IndusInd Bank Limited); Indranil Pan (IDFC FIRST Bank); Karan Mehrishi (Acuité Ratings & Research Limited); Nikhil Gupta (Motilal Oswal Financial Services Ltd); Rahul Bajoria (Barclays Bank PLC); Rini Sen (ANZ Research); Rupa Rege Nitsure (L&T Finance Holdings); Sameer Narang (Bank of Baroda); Shailesh Kejariwal (B&K Securities India Pvt Ltd); Siddharth Kothari (Sunidhi Securities & Finance Ltd); TAC Economics; Tirthankar Patnaik (National Stock Exchange); Upasna Bhardwaj (Kotak Mahindra Bank) and YES Bank.

The Bank also acknowledges the contribution of fourteen others SPF panellists, who prefer to remain anonymous.


Annex 1: Annual Forecasts for 2020-21
  Key Macroeconomic Indicators Annual Forecasts for 2020-21
Mean Median Max Min 1st quartile 3rd quartile
1 GDP at constant (2011-12) prices: Annual Growth (per cent) -9.1 -9.1 -3.0 -14.9 -10.5 -8.0
a Private Final Consumption Expenditure (PFCE) at constant (2011-12) prices: Annual Growth (per cent) -10.7 -11.0 -5.0 -20.0 -12.3 -8.6
b Gross Fixed Capital Formation (GFCF) at constant (2011-12) prices: Annual Growth (per cent) -20.3 -21.0 0.1 -33.2 -26.7 -16.7
2 Private Final Consumption Expenditure (PFCE) at current prices: Annual Growth (per cent) -7.2 -6.9 -2.8 -16.8 -8.9 -4.4
3 Gross Capital Formation (GCF) Rate (per cent of GDP at current market prices) 25.0 25.4 28.0 20.8 23.9 26.4
4 GVA at constant (2011-12) prices: Annual Growth (per cent) -8.7 -8.4 -3.2 -14.0 -10.1 -7.7
a Agriculture & Allied Activities at constant (2011-12) prices: Annual Growth (per cent) 3.6 3.7 4.8 1.7 3.3 4.0
b Industry at constant (2011-12) prices: Annual Growth (per cent) -13.2 -13.0 -5.0 -20.7 -15.9 -11.0
c Services at constant (2011-12) prices: Annual Growth (per cent) -9.5 -9.7 -3.9 -15.3 -11.6 -7.8
5 Gross Saving Rate (per cent of Gross National Disposable Income) - at current prices 26.8 26.0 30.1 24.7 25.4 28.0
6 Fiscal Deficit of Central Govt. (per cent of GDP at current market prices) 7.6 7.5 9.0 5.5 7.4 8.0
7 Combined Gross Fiscal Deficit (per cent to GDP at current market prices) 12.1 12.0 14.0 6.7 12.0 12.5
8 Bank Credit of Scheduled commercial banks: Annual Growth (per cent) 4.8 5.0 6.5 -4.0 5.0 6.0
9 Yield on 10-Year G-Sec of Central Govt. (end-period) 6.0 6.0 6.5 5.6 5.8 6.2
10 Yield on 91-day T-Bill of Central Govt. (end-period) 3.4 3.4 4.0 3.0 3.3 3.6
11 Merchandise Exports (BoP basis in US$ terms): Annual Growth (per cent) -14.8 -14.7 -6.1 -31.0 -16.5 -12.3
12 Merchandise Imports (BoP basis in US$ terms): Annual Growth (per cent) -23.6 -22.7 -17.7 -33.0 -26.1 -20.7
13 Current Account Balance in US$ bn. 9.0 10.1 53.5 -91.2 1.0 22.5
14 Current Account Balance (per cent to GDP at current market prices) 0.6 0.5 2.1 -0.8 0.3 0.9
15 Overall BoP in US$ bn. 71.5 71.3 110.2 19.0 61.5 83.3
16 Inflation based on CPI Combined: Headline 5.5 5.6 6.5 4.8 5.3 5.7
17 Inflation based on CPI Combined: excluding Food and Beverages, Pan, Tobacco and Intoxicants and Fuel and Light 5.3 5.3 6.0 4.3 5.2 5.4
18 Inflation based on WPI: All Commodities 0.0 -0.4 2.0 -2.2 -0.5 0.5
19 Inflation based on WPI: Non-food Manufactured Products 0.3 0.5 2.0 -3.0 0.3 0.6

Annex 2: Annual Forecasts for 2021-22
  Key Macroeconomic Indicators Annual Forecasts for 2021-22
Mean Median Max Min 1st quartile 3rd quartile
1 GDP at constant (2011-12) prices: Annual Growth (per cent) 8.3 8.2 10.2 2.9 7.5 9.7
a Private Final Consumption Expenditure (PFCE) at constant (2011-12) prices: Annual Growth (per cent) 9.5 8.5 15.8 5.0 7.7 11.4
b Gross Fixed Capital Formation (GFCF) at constant (2011-12) prices: Annual Growth (per cent) 9.6 10.0 13.6 5.0 8.6 10.5
2 Private Final Consumption Expenditure (PFCE) at current prices: Annual Growth (per cent) 12.3 11.4 17.0 9.5 9.9 14.4
3 Gross Capital Formation (GCF) Rate (per cent of GDP at current market prices) 27.7 27.7 32.0 22.2 26.6 29.6
4 GVA at constant (2011-12) prices: Annual Growth (per cent) 8.0 8.2 10.0 2.8 7.4 8.9
a Agriculture & Allied Activities at constant (2011-12) prices: Annual Growth (per cent) 3.4 3.2 5.6 2.0 3.0 3.9
b Industry at constant (2011-12) prices: Annual Growth (per cent) 9.7 9.7 16.0 1.4 7.8 11.7
c Services at constant (2011-12) prices: Annual Growth (per cent) 9.0 9.1 11.6 3.3 9.0 9.8
5 Gross Saving Rate (per cent of Gross National Disposable Income) - at current prices 27.5 27.0 31.6 24.0 25.6 29.3
6 Fiscal Deficit of Central Govt. (per cent of GDP at current market prices) 5.6 5.5 8.0 3.6 5.0 6.4
7 Combined Gross Fiscal Deficit (per cent to GDP at current market prices) 9.1 9.0 11.5 6.6 8.5 10.0
8 Bank Credit of Scheduled commercial banks: Annual Growth (per cent) 8.9 8.5 12.3 6.2 7.5 10.0
9 Yield on 10-Year G-Sec of Central Govt. (end-period) 6.3 6.5 6.8 5.3 6.1 6.5
10 Yield on 91-day T-Bill of Central Govt. (end-period) 4.1 4.0 5.1 3.3 3.8 4.2
11 Merchandise Exports (BoP basis in US$ terms): Annual Growth (per cent) 11.1 10.2 25.0 -2.9 9.5 14.3
12 Merchandise Imports (BoP basis in US$ terms): Annual Growth (per cent) 20.4 20.6 41.0 -5.3 13.2 26.8
13 Current Account Balance in US$ bn. -23.3 -19.8 -5.9 -65.4 -25.9 -16.2
14 Current Account Balance (per cent to GDP at current market prices) -1.2 -0.6 0.7 -7.6 -0.9 -0.3
15 Overall BoP in US$ bn. 51.7 50.0 82.6 22.6 42.7 60.0
16 Inflation based on CPI Combined: Headline 4.3 4.2 6.2 3.4 4.0 4.5
17 Inflation based on CPI Combined: excluding Food and Beverages, Pan, Tobacco and Intoxicants and Fuel and Light 4.4 4.4 5.1 3.5 4.1 4.8
18 Inflation based on WPI: All Commodities 2.3 2.0 3.5 1.4 1.8 2.8
19 Inflation based on WPI: Non-food Manufactured Products 1.8 1.8 4.0 0.3 1.0 2.5

Annex 3: Quarterly Forecasts from Q2:2020-21 to Q2:2021-22
  Key Macroeconomic Indicators Quarterly Forecasts
Q2: 2020-21 Q3: 2020-21 Q4: 2020-21
Mean Median Max Min Mean Median Max Min Mean Median Max Min
1 GDP at constant (2011-12) prices: Annual Growth (per cent) -10.1 -10.0 0.6 -16.2 -3.1 -3.2 6.0 -11.2 0.3 0.6 7.5 -8.9
a Private Final Consumption Expenditure (PFCE) at constant (2011-12) prices: Annual Growth (per cent) -12.1 -12.9 1.5 -19.3 -4.6 -5.2 4.0 -12.6 -0.3 -0.4 6.0 -8.8
b Gross Fixed Capital Formation (GFCF) at constant (2011-12) prices: Annual Growth (per cent) -23.5 -25.0 -2.6 -37.4 -11.9 -10.0 9.6 -27.9 -4.4 -4.4 14.1 -20.1
2 Private Final Consumption Expenditure (PFCE) at current prices: Annual Growth (per cent) -8.6 -9.5 2.5 -18.6 -2.0 -2.3 6.6 -13.5 2.8 2.6 10.5 -11.2
3 Gross Fixed Capital Formation (GFCF) Rate (per cent of GDP at current market prices) 23.5 23.3 29.0 20.2 24.9 24.6 29.0 21.5 25.2 25.2 29.0 21.8
4 GVA at constant (2011-12) prices: Annual Growth (per cent) -9.7 -9.6 0.4 -15.4 -2.9 -3.0 6.0 -10.9 0.1 0.3 6.5 -7.6
a Agriculture & Allied Activities at constant (2011-12) prices: Annual Growth (per cent) 3.7 3.5 5.5 2.3 3.8 3.9 5.5 2.4 3.6 4.0 5.1 -0.8
b Industry at constant (2011-12) prices: Annual Growth (per cent) -14.4 -15.1 0.3 -25.1 -6.4 -6.6 3.0 -15.7 -1.5 -0.8 7.6 -13.4
c Services at constant (2011-12) prices: Annual Growth (per cent) -10.7 -11.3 0.1 -16.6 -4.0 -4.0 6.0 -12.7 -0.1 0.5 6.0 -9.5
5 IIP (2011-12=100): Quarterly Average Growth (per cent) -8.3 -7.5 0.5 -20.5 -2.0 -3.5 9.8 -10.4 2.5 2.1 24.2 -6.4
6 Merchandise Exports - BoP basis (in US$ bn.) 65.7 68.4 72.0 51.3 73.1 72.6 78.1 65.4 77.1 77.4 86.6 68.9
7 Merchandise Imports - BoP basis (in US$ bn.) 82.5 87.8 95.9 60.4 96.9 95.7 109.2 82.5 104.2 104.9 118.4 92.5
8 Rupee per US $ Exchange rate (end-period) 73.7 73.5 75.5 72.0 73.6 73.7 75.0 71.0 73.6 73.5 76.0 70.5
9 Crude Oil (Indian basket) price (US $ per barrel) (end-period) 41.3 42.5 45.0 28.0 44.0 45.0 48.0 35.0 45.4 45.0 53.0 39.0
10 Policy Repo Rate (end-period) 3.94 4.00 4.00 3.00 3.91 4.00 4.00 2.75 3.83 4.00 4.40 2.75

  Key Macroeconomic Indicators Quarterly Forecasts
Q1: 2021-22 Q2: 2021-22
Mean Median Max Min Mean Median Max Min
1 GDP at constant (2011-12) prices: Annual Growth (per cent) 18.8 17.8 33.0 8.1 9.4 8.8 18.7 5.0
a Private Final Consumption Expenditure (PFCE) at constant (2011-12) prices: Annual Growth (per cent) 21.1 20.8 37.5 4.1 11.1 9.9 22.7 4.5
b Gross Fixed Capital Formation (GFCF) at constant (2011-12) prices: Annual Growth (per cent) 26.4 28.3 50.5 7.8 13.7 10.8 30.0 5.0
2 Private Final Consumption Expenditure (PFCE) at current prices: Annual Growth (per cent) 21.3 19.4 36.5 7.7 12.7 11.7 23.7 8.1
3 Gross Fixed Capital Formation (GFCF) Rate (per cent of GDP at current market prices) 23.8 22.8 32.0 19.4 25.6 24.5 32.0 21.3
4 GVA at constant (2011-12) prices: Annual Growth (per cent) 17.2 15.8 28.0 7.3 9.2 8.4 18.3 6.2
a Agriculture & Allied Activities at constant (2011-12) prices: Annual Growth (per cent) 3.8 3.5 6.5 2.2 3.5 3.0 5.8 2.0
b Industry at constant (2011-12) prices: Annual Growth (per cent) 24.4 22.6 53.7 6.5 10.5 8.9 18.0 5.7
c Services at constant (2011-12) prices: Annual Growth (per cent) 17.0 17.9 27.0 9.1 9.7 8.8 15.0 6.8
5 IIP (2011-12=100): Quarterly Average Growth (per cent) 26.3 26.8 52.7 2.8 9.9 9.2 25.0 1.5
6 Merchandise Exports - BoP basis (in US$ bn.) 75.7 76.0 89.0 66.5 77.7 76.0 98.0 71.3
7 Merchandise Imports - BoP basis (in US$ bn.) 103.4 102.1 121.2 92.6 107.5 107.0 123.6 99.0
8 Rupee per US $ Exchange rate (end-period) 73.6 73.0 76.5 70.0 73.2 73.0 76.5 69.5
9 Crude Oil (Indian basket) price (US $ per barrel) (end-period) 48.1 45.0 55.0 40.2 50.3 50.0 60.0 41.4
10 Policy Repo Rate (end-period) 3.76 3.75 4.50 3.00 3.89 3.75 5.50 3.50

Annex 4: Forecasts of CPI Combined Inflation
(per cent)
  CPI Combined (General) CPI Combined excluding Food and Beverages, Pan, Tobacco and Intoxicants and Fuel and Light
Mean Median Max Min Mean Median Max Min
Q2:2020-21 6.6 6.6 6.8 5.9 5.5 5.5 6.7 5.2
Q3:2020-21 5.0 4.9 6.6 4.2 5.5 5.6 6.2 4.7
Q4:2020-21 4.3 4.2 6.5 2.9 5.2 5.2 5.9 4.0
Q1:2021-22 3.9 3.9 6.3 2.3 4.6 4.7 5.5 3.2
Q2:2021-22 3.9 3.8 6.0 2.8 4.3 4.2 5.2 3.4

Annex 5: Forecasts of WPI Inflation
(per cent)
  WPI All Commodities WPI Non-food Manufactured Products
Mean Median Max Min Mean Median Max Min
Q2:2020-21 -0.1 0.0 0.7 -1.8 0.3 0.4 1.7 -2.7
Q3:2020-21 0.2 0.1 2.6 -2.3 1.4 1.3 2.9 0.3
Q4:2020-21 0.7 0.3 5.2 -2.1 1.2 1.2 2.6 -0.1
Q1:2021-22 2.6 2.5 4.8 0.9 1.8 2.0 3.0 0.8
Q2:2021-22 2.3 2.1 4.5 1.0 1.7 1.9 3.2 0.3

Annex 6: Mean probabilities attached to possible outcomes of Real GDP growth
Growth Range Forecasts for 2020-21 Forecasts for 2021-22
10.0 per cent or more 0 0.09
9.5 to 9.9 per cent 0 0.14
9.0 to 9.4 per cent 0 0.07
8.5 to 8.9 per cent 0 0.11
8.0 to 8.4 per cent 0 0.16
7.5 to 7.9 per cent 0 0.14
7.0 to 7.4 per cent 0 0.16
6.5 to 6.9 per cent 0 0.04
6.0 to 6.4 per cent 0 0.03
5.5 to 5.9 per cent 0 0.00
5.0 to 5.4 per cent 0 0.01
4.5 to 4.9 per cent 0 0.00
4.0 to 4.4 per cent 0 0.00
3.5 to 3.9 per cent 0 0.02
3.0 to 3.4 per cent 0 0.02
2.5 to 2.9 per cent 0 0.02
2.0 to 2.4 per cent 0 0
1.5 to 1.9 per cent 0 0
1.0 to 1.4 per cent 0 0
0.5 to 0.9 per cent 0 0
0.0 to 0.4 per cent 0 0
-0.5 to -0.1 per cent 0 0
-1.0 to -0.6 per cent 0 0
-1.5 to -1.1 per cent 0 0
-2.0 to -1.6 per cent 0 0
-2.5 to -2.1 per cent 0.01 0
-3.0 to -2.6 per cent 0.02 0
-3.5 to -3.1 per cent 0.00 0
-4.0 to -3.6 per cent 0.00 0
-4.5 to -4.1 per cent 0.00 0
-5.0 to -4.6 per cent 0.00 0
-5.5 to -5.1 per cent 0.03 0
-6.0 to -5.6 per cent 0.02 0
-6.5 to -6.1 per cent 0.07 0
-7.0 to -6.6 per cent 0.03 0
-7.5 to -7.1 per cent 0.04 0
-8.0 to -7.6 per cent 0.04 0
-8.5 to -8.1 per cent 0.12 0
-9.0 to -8.6 per cent 0.17 0
below -9.0 per cent 0.43 0
Note: The sum of the probabilities may not add up to one due to rounding off.

Annex 7: Mean probabilities attached to possible outcomes of CPI (Combined) inflation
Inflation Range Forecasts for Q2:2020-21 Forecasts for Q3:2020-21 Forecasts for Q4:2020-21 Forecasts for Q1:2021-22
9.0 per cent or above 0 0 0 0
8.5 to 9.0 per cent 0 0 0 0
8.0 to 8.4 per cent 0 0 0 0
7.5 to 7.9 per cent 0 0 0 0
7.0 to 7.4 per cent 0.05 0 0 0
6.5 to 6.9 per cent 0.63 0.03 0.03 0
6.0 to 6.4 per cent 0.23 0.04 0.01 0.03
5.5 to 5.9 per cent 0.04 0.14 0.02 0.02
5.0 to 5.4 per cent 0.01 0.29 0.10 0.13
4.5 to 4.9 per cent 0.01 0.32 0.17 0.15
4.0 to 4.4 per cent 0.02 0.15 0.30 0.19
3.5 to 3.9 per cent 0 0.04 0.25 0.19
3.0 to 3.4 per cent 0 0 0.09 0.17
2.5 to 2.9 per cent 0 0 0.03 0.07
2.0 to 2.4 per cent 0 0 0 0.04
1.5 to 1.9 per cent 0 0 0 0.01
1.0 to 1.4 per cent 0 0 0 0
0.5 to 0.9 per cent 0 0 0 0
0 to 0.4 per cent 0 0 0 0
-0.5 to -0.1 per cent 0 0 0 0
-1.0 to -0.6 per cent 0 0 0 0
Below -1.0 per cent 0 0 0 0
Note: The sum of the probabilities may not add up to one due to rounding off.
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.

1 The results of the previous survey round were released on the RBI website on August 6, 2020.

2 The results presented here represent the views of the respondent forecasters and in no way reflect the views or forecasts of the Reserve Bank.


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