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Journalism of Courage
The Reserve Banks forecasters survey has upped the growth projections for key sectors against the backdrop of a strong economic recovery and estimated the GDP growth for the year at 6.9 per cent against 6 per cent earlier. Ahead of the monetary policy review on Friday, the RBI said that sectoral growth rate forecast for the agricultural sector for the year has been revised upwards to negative 0.9 per cent from the earlier forecast of negative 1.4. The forecasters’ survey has also upped the industry growth to 8.4 per cent from 6.3 per cent and that of services sector to 8.7 per cent as compared to 8.1 per cent in the earlier survey.
The RBI forecast on economic growth said the upside prospects for further growth acceleration in the near term derive support from several factors,including signs of revival in private demand,both consumption and investment,possibility of strong industrial recovery continuing and outlook for better Rabi crop. It also said that the export growth remains positive,and there is general improvement in business sentiments.
The downside risks to growth in the near-term could be seen in terms of the adverse impact of the deficient monsoon on kharif crop in the GDP of next quarter,weakness in services activities that are dependent on external demand,notwithstanding the signs of improvements in recent months; and possible pressures on interest rates that may emerge from revival in demand for credit from the private sector as well as inflation expectations. Risks to global growth and higher oil prices also need to be given due consideration, it said.
