Reserve Bank Survey of Professional Forecasters Expects GDP To Contract By 1.5% In 2020-21

Reserve Bank released the responses from the latest round of the Survey of Professional Forecasters (SPF). Real gross domestic product (GDP) is likely to contract by 1.5% in 2020-21 but is expected to revert to growth terrain next year, when it is likely to grow by 7.2%. Real private final consumption expenditure (PFCE) is expected to decline by 0.5% during 2020-21 but likely to record 6.9% growth during 2021-22. Real gross fixed capital formation (GFCF) is likely to register negative growth of 6.4% in 2020-21 but likely to grow by 5.6% in 2021-22.

Forecasters have assigned the highest probability to real GDP growth lying below 2% in 2020-21. For 2021-22, highest probability has been assigned to GDP growth lying between 6.0-6.4%. Real gross value added (GVA) is expected to decline by 1.7% in 2020-21 but is likely to record 6.8% growth in 2021-22, supported by uptick in industrial and services sector activities.

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