Professional forecasters cut FY14 GDP growth forecast to 6%

The forecast reflects views of professional forecasters outside RBI and not of the central bank

The Reserve Bank of India's (RBI) survey of professional forecasters today cut their prediction on real gross domestic product (GDP) growth for 2013-14 to 6% from 6.5% in the last round.

However, it is still better than the growth forecast for last financial year.

"The Reserve Bank's 23rd round of the survey of professional forecasters shows anticipation of modest recovery in 2013-14 to 6% from 5% in the preceding year," RBI said in its macro-economic and monetary developments report released today.

The forecast reflects the views of professional forecasters outside RBI and not of the central bank.

The average wholesale price index (WPI) inflation is expected to moderate to 6.5% from 7.3%.

"Both the latest growth and inflation projections are half a percentage downward revision from the earlier round. Forecasters expect the CAD (current account deficit) to come down to 4.5% of GDP in 2013-14 from a projected 5.1% for 2012-13," RBI said.

The central government's gross fiscal deficit is forecast at 5% of GDP in 2013-14.

The exchange rate of rupee against US dollar is project at 53.75 at the end of current financial year, while the yield of 91-days treasury bill is forecast at 7.3%.

RBI noted the current growth slowdown has been amplified by the loss of business confidence.

"Confidence has been dented by macro-economic deterioration, global macro-economic and financial uncertainties and the perception of adverse and biased information, driven in part by recent experience during the global financial crisis. In this environment, expectations are being anchored around recent bad news," the banking regulator said.