There's Cause for Optimism
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.