There's Cause for Op­ti­mism

The Economic Times - - Rbi Monetary Policy -

RBI projects 2016-17 GDP growth at con­fi­dence up­beat, says cen­tral bank Growth may ac­cel­er­ate to

But cor­po­rate ex­pec­ta­tions of busi­ness con­di­tions sub­dued In­fla­tion to ease to in March 2017 and in Mar 2018



op­ti­mistic about pur­chas­ing en­vi­ron­ment, it says

dence re­mains up­beat, as peo­ple are pos­i­tive about their fu­ture eco­nomic and in­come prospects, while house­holds are op­ti­mistic about their pur­chas­ing en­vi­ron­ment. “Con­sumer con­fi­dence is bet­ter placed in ur­ban ar­eas but has been hit in ru­ral ar­eas be­cause of the drought and gov­ern­ment schemes like NREGA have not fully com­pen­sated for the loss of in­come. Ru­ral spend­ing has still not picked up and the mon­soon will be cru­cial in this re­gard,” Sau­gata Bhat­tacharya, chief econ­o­mist, Axis Bank, said.

But, cor­po­rate ex­pec­ta­tions of busi­ness con­di­tions re­main sub­dued as RBI’s busi­ness ex­pec­ta­tions sur­vey has shown a dip in the first quar­ter of the cur­rent fis­cal com­pared with the ex­pec­ta­tions in the quar­ter ended March. “Pro­fes­sional fore­cast­ers sur- veyed by Re­serve Bank dur­ing March ex­pected out­put growth to pick up grad­u­ally from 7.3% in 2015-16:Q4 to 7.7% in 2016-17:Q4, al­most en­tirely on ac­countof re­cov­ery­i­na­gri­cul­ture­and al­lied ac­tiv­i­ties. Staff projects gross value added growth to im­prove grad­u­ally dur­ing 2016-17 to 7.6%, with quar­terly growth in a range of 7.3-7.7% and risks evenly bal­anced around this base­line pro­jec­tion,” RBI said.





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