Q1 FY20 GDP growth pegged at 6 pc: FICCI Economic Outlook Survey

FICCI's latest Economic Outlook Survey released on Monday puts the quarterly median forecast at 6 per cent for GDP growth in the first quarter of 2019-20.

The growth numbers for the first quarter are expected to be released by the Central Statistics Office (CSO) next week.

Furthermore, the annual median GDP growth forecast for 2019-20 has been pegged at 6.9 per cent with a minimum and maximum estimate of 6.7 per cent and 7.2 per cent respectively.

While the median growth forecast for agriculture and allied activities has been put at 2.2 per cent for 2019-20, the industry and services sectors are expected to grow by 6.9 per cent and 8 per cent respectively.

The survey was conducted during the months of June and July by economists belonging to the industry, banking and financial services sectors.

With regard to inflation, the latest official numbers report moderate price levels. The outlook of participating economists on inflation also remains benign. The median forecast for Wholesale Price Index-based inflation rate for 2019-20 has been put at 2.9 per cent with a minimum and maximum estimate of 2.1 per cent and 5.7 per cent respectively.

The Consumer Price Index, on the other hand, has a median forecast of 3.7 per cent for 2019-20 with a minimum and maximum estimate of 3.4 per cent and 4.1 per cent respectively.

Concerns remain on the external front with median current account deficit forecast pegged at 2.3 per cent of GDP for 2019-20. Merchandise exports are expected to grow by 3.6 per cent while imports are expected to grow by 4 per cent.

An overall decline in global growth forecasts, escalating trade tensions, uncertainty around Brexit and foggy outlook on international crude oil prices have emerged as key concerns on the external front.

Slower global growth will impact India's growth prospects as well from going forward. In fact, economists unanimously indicated that India's potential growth rate would be in 7 to 7.5 per cent range, which is lower than the 8 per cent plus potential growth rate estimated until a few years back.

On the strategies to achieve India's potential growth rate, the surveyed economists suggested four key areas that needed immediate attention -- boosting the agriculture sector, strengthening MSMEs, undertaking factor market reforms and enhancing avenues for infrastructure financing.