FICCI Economic Outlook Survey

April 2010

FICCI, Federation House, 1, Tansen Marg, New Delhi

FICCI Economic Outlook Survey – April 2010

About the Survey

The Economic Outlook Survey was conducted during the period March 20, 2010 to April 10, 2010. As
part of the survey, a structured questionnaire was drawn up and sent to key economists for their inputs
and views. 12 economists of repute participated in the survey. These economists largely come from the
banking and financial sector. The sample however also includes economists from industry and research
institutions.

The economists were asked to provide their forecast for key macro economic variables for the year
2009-10 and 2010-11 as well as for Quarter 4 (Jan-Mar) of 2009-10 and Quarter 1 (Apr-Jun) of 2010-11.

In addition to these, FICCI sought the views of economists on six topical economic issues – expected
monetary policy action by RBI in the forthcoming monetary policy review and potential impact on
interest rates and industry performance; resource mobilization by corporate India for funding
investments; how realistic is the Rs. 40,000 crore disinvestment target for 2010-11?; besides
disinvestment and 3G auction how can government raise more resources in 2010-11?, is the rebound
seen in India’s exports sustainable?; and is it time to look at some policy action towards capital flows?

The feedback received from the participating economists was aggregated and analyzed. The results
obtained are presented in the following pages.

The findings of the survey represents the views of the leading economists and do not reflect the views
of FICCI.

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FICCI Economic Outlook Survey – April 2010

Executive Summary

Annual Forecasts for 2009-10

♣ GDP growth – 7.2 percent

♣ Agriculture and allied activities growth – (-) 0.2 percent
♣ Industry growth – 10.0 percent
♣ Services growth – 8.1 percent
♣ Fiscal Deficit – 6.7 percent of GDP
♣ IIP – 10.5 percent
♣ Bank credit growth – 16.5 percent

Annual Forecasts for 2010-11

♣ GDP growth – 8.4 percent

♣ Agriculture and allied activities growth – 4.0 percent
♣ Industry growth – 9.2 percent
♣ Services growth – 9.3 percent
♣ Fiscal Deficit – 5.8 percent of GDP
♣ IIP – 10.0 percent
♣ WPI inflation rate (End March 2011) – 5.5percent
♣ USD / INR exchange rate (End March 2011) – Rs. 43.25 / USD
♣ Bank credit growth – 19.0 percent

Quarterly Forecasts for Q4 of 2009-10 and Q1 of 2010-11

♣ GDP growth – 8.7 percent (Q4, 2009-10) and 8.9 percent (Q1, 2010-11)
♣ Agriculture and allied activities growth – (-) 0.5 percent (Q4, 2009-10) and 3.0 percent (Q1, 2010-11)
♣ Industry growth – 12.9 percent (Q4, 2009-10) and 11.0 percent (Q1, 2010-11)
♣ Services growth – 8.8 percent (Q4, 2009-10) and 9.2 percent (Q1, 2010-11)
♣ IIP – 15.2 percent (Q4, 2009-10) and 13.0 percent (Q1, 2010-11)
♣ WPI inflation rate – 9.3 percent (Q1, 2010-11)
♣ USD / INR exchange rate – Rs. 44.75 / USD (Q1, 2010-11)
♣ Bank credit growth – 16.6 percent (Q4, 2009-10) and 16.6 percent (Q1, 2010-11)

Economists’ views on

♣ Expected monetary policy action by RBI and potential impact on interest rates and corporate
performance. Majority of the surveyed economists expect another round of monetary tightening by
RBI in the forthcoming monetary policy review. Repo and reverse repo rates are expected to be
hiked by 25 bps each. CRR could be hiked by up to 50 bps. Majority of the participants also feel that
given the comfortable liquidity position in the system, a hike in policy rates by RBI is unlikely to be
followed by an immediate hike in interest rates by banks. Even if banks increase the lending rates,
corporates would not see much of an impact on their bottom line as other (non-bank sources) of
funds could be substituted for bank funding.

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♣ Resource mobilization by corporates for funding investments. Consensus amongst economists that
investment cycle is gaining strength. Expect more money to be raised through the ECB, FCCB, ADR /
GDR route. Companies are also expected to raise sizable resources from the equity market in the
current year in view of the trend observed in the latter part of 2009. With sub-PLR lending being
discontinued following the introduction of base rate framework, one can expect companies,
especially large corporates, to use Corporate Deposits and Commercial Paper route in a larger
manner for raising resources.

♣ Feasibility of the Rs. 40,000 crore disinvestment target for 2010-11. Majority view is that this is an
ambitious target but is achievable. Meeting this target is contingent upon – alignment of IPO/FPO
prices closer to market expectations, initiating a few big ticket issues such as BSNL, MMTC, SAIL, and
continued good performance of equity markets. The downside risk to equity market this year is on
account of sovereign debt crisis as seen in Greece, tightening of monetary policy by RBI and upward
movement in oil prices.

♣ How government can raise additional financial resources in 2010-11. Economists feel that in the
current year a robust growth path will automatically help shore up government’s revenues. Cutting
down on subsidies and linking prices of oil and oil products to the market were some suggestions
that were received from a few economists. Finally, there was a clear agreement amongst all survey
respondents that the government should push for quick implementation of the GST regime and the
DTC regime as these are expected to generate greater resources for the exchequer.

♣ Sustainability of recent export performance. The majority view is that outlook for exports is
positive and we can expect exports to clock 15 percent growth (median forecast) in 2010-11. As Asia
now accounts for a sizable part of India’s exports, growth in this region augurs well for our near
term export performance. However, recovery in western economies is still fragile with
unemployment levels in US, UK and Eurozone still high. Consumption levels in these markets are still
quiet low and with rising oil prices it could get further dented. With sovereign defaults risks looming
large and pressure on countries to undertake fiscal correction, how the western markets can
provide sizable demand remains a question. In addition to this, movement of the Rupee vis-à-vis the
Dollar and Euro would also have a bearing on exports. These are the risks for a sustained pickup in
India’s exports going forward.

Whether rising capital flows demand some policy action. No policy action against capital flows is
warranted at this point in time. Capital flows into India are in line with the fundamentals of the
economy, particularly the buoyant domestic growth prospects. Our current account deficit is
widening and additional capital flows will offset this. Rising capital flows would even otherwise
temper once the developed economies normalize their monetary policy conditions. With an
ambitious disinvestment programme on the anvil, it is imperative that the government takes no
steps that could hurt sentiment of foreign investors.

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 FICCI Economic Outlook Survey – April 2010

♣ Annual Forecasts for 2009-10 6

♣ Annual Forecasts for 2010-11 7
♣ Quarterly Forecasts for Q4 (Jan-Mar) of 2009-10 and Q1 (Apr-Jun) of 2010-11 8
♣ Economists’ views on expected monetary policy action by RBI and potential impact on
interest rates and corporate performance 9
♣ Economists’ views on resource mobilization by corporates for funding investments 11
♣ Economists’ views on feasibility of the Rs. 40,000 crore disinvestment target for 2010-11 12
♣ Economists’ views on how government can raise additional financial resources in 2010-11 13
♣ Economists’ views on sustainability of recent export performance 14
♣ Economists’ views on whether rising capital flows demand some policy action 15

TABLES

♣ Annual Forecasts for 2009-10 16

♣ Annual Forecasts for 2010-11 16
♣ Quarterly Forecasts for Q4 (Jan-Mar) of 2009-10 and Q1 (Apr-Jun) of 2010-11 17

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 FICCI Economic Outlook Survey – April 2010

♣ Annual Forecasts for 2009-101

The economists participating in the Economic Outlook Survey have forecasted annual GDP growth rate
(at factor cost) for the year 2009-10 to be 7.2 percent. The forecast for GDP growth rate ranged
between a minimum of 6.8 percent to a maximum of 7.5 percent.

The sectoral GDP forecast for the year 2009-10 shows that agriculture will show a negative growth of
0.2 percent. Agriculture sector’s growth rate forecast ranged between -1.3 percent and 0.6 percent. The
economists expect the industry sector to grow at 10.0 percent and the services sector to mark a
growth of 8.1 percent in 2009-10. While the range for industry sector growth is 7.5 percent to 10.5
percent, the range for services sector growth is 7.8 percent to 10.0 percent.

The economists have projected that the fiscal deficit of the centre for the year 2009-10 would be 6.7
percent of GDP. The range for the projections for fiscal deficit varies from 6.5 percent to 6.9 percent.

The participating economists anticipate that IIP would grow by 10.5 percent during the fiscal 2009-10.

The surveyed economists have estimated that CPI (IW) inflation would be at a level of 15.5 percent by
end March 2010.

The money supply (M3) growth is projected to be 17.5 percent during 2009-10.

The economists have forecasted the growth rate of exports and imports for the financial 2009-10 to be
in a negative territory. While the median forecast for export growth is -9.3 percent, the same for
imports is -9.5 percent. Even the trade balance is expected to be in the negative territory at -8.8
percent of the GDP during the current fiscal.

Economists expect that bank credit growth for the year 2009-10 would stand at 16.5 percent.

1
All forecast figures indicated are the median forecast of the sample

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 FICCI Economic Outlook Survey – April 2010

♣ Annual Forecasts for 2010-112

The economists participating in the Economic Outlook Survey have forecasted annual GDP growth rate
(at factor cost) for the year 2010-11 to be 8.4 percent. The forecast for GDP growth rate ranged
between a minimum of 8.0 percent to a maximum of 9.0 percent.

The sectoral GDP forecast for the year 2010-11 shows that agriculture will show a positive growth of
4.0 percent. Agriculture sector’s growth rate forecast ranged between 2.5 percent and 5.0 percent. The
economists expect the industry sector to grow at 9.2 percent and the services sector to mark a growth
of 9.3 percent in 2010-11. While the range for industry sector growth is 8.5 percent to 11.0 percent, the
range for services sector growth is 8.8 percent to 12.0 percent.

The economists have projected that the fiscal deficit of the centre for the year 2010-11 would be 5.8
percent of GDP. The range for the projections for fiscal deficit varies from 5.5 percent to 6.0 percent.

The surveyed economists anticipate that IIP would grow by 10.0 percent during the fiscal 2010-11.

The surveyed economists have estimated that while WPI inflation will settle around 5.5 percent by end
March 2011, the CPI (IW) inflation would be a little higher at about 8.5 percent by end March 2011.

The money supply (M3) growth is projected to be 19.6 percent during 2010-11.

For 2010-11, while the median forecast for export growth is 15.0 percent, the same for imports is 12.0
percent. The trade balance is expected to be in the negative territory at -8.3 percent of the GDP during
the current fiscal.

Economists expect that bank credit growth for the year 2010-11 would stand at 19.0 percent.

2
All forecast figures indicated are the median forecast of the sample

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 FICCI Economic Outlook Survey – April 2010

♣ Quarterly Forecasts for Q4 (Jan-Mar) of 2009-103 and Q1 (Apr-Jun) of 2010-114

The economists have projected GDP growth (at factor cost) for the fourth quarter (Q4) of 2009-10 to be
8.7 percent and then rise during the first quarter (Q1) of 2010-11 to 8.9 percent.

Looking at a sector wise growth projections the economists feel that there will be a dip in the growth
rate of agriculture and allied activities - the agri sector is estimated to decline by 0.5 percent in Q4,
2009-10. Growth in the agricultural sector would however enter positive territory in the Q1 of 2010-11
with the sector expected to grow at a robust 3.0 percent.

The industry sector is expected to grow by a strong 12.9 percent in Q4 of 2009-10 and then slow down a
bit to 11.0 percent in Q1 of 2010-11. Growth in the services sector is however expected to pick up from
8.8 percent in Q4 of 2009-10 to 9.2 percent in Q1 of 2010-11.

Economists anticipate CPI (IW) would be 15.4 percent during Q4, 2009-10. For Q1, 2010-11, the
projections for WPI and CPI (IW) are 9.3 percent and 11.8 percent respectively.

Economists foresee money supply growth at 18.1 percent during Q4, 2009-10 and at 17.5 percent
during Q1, 2010-11.

The survey respondents are optimistic about export performance with the growth projected at 22.6
percent during Q4, 2009-10 and 23.2 percent during the first quarter of the current fiscal. Imports are
expected to show a strong performance growing by an expected 46.7 percent in Q4, 2009-10 and 22.2
percent in Q1, 2010-11.

The economists feel that the country’s trade balance will be in a negative zone in both the fourth
quarter of 2009-10 and in the first quarter of 2010-11. The trade balance is projected at (-) 7.3 percent
of GDP for Q4, 2009-10 and at (-) 6.8 percent of GDP in Q1 of 2010-11.

The forecasters feel that exchange rate of Rupee would be around 44.75 per USD in Q1 of 2010-11.

Economists have projected bank credit to grow by 16.6 percent in the fourth quarter of 2009-10 as well
as the first quarter of 2010-11.

3
All forecast figures indicated are the median forecast of the sample. Sample size varies as not all participants provided
quarterly projections and for all variables
4
All forecast figures indicated are the median forecast of the sample. Sample size varies as not all participants provided
quarterly projections and for all variables
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 FICCI Economic Outlook Survey – April 2010

♣ Economists’ views on expected monetary policy action by RBI and potential impact on
interest rates and corporate performance

In the January 2010 Monetary Policy Review the Reserve Bank of India raised the Cash Reserve Ratio by
75 basis points. Soon after, in the month of March 2010, both the repo and the reverse repo rates were
increased by 25 basis points each. These were clear signals from the central bank on the direction it
wants the interest rates to move in the months ahead. With the next Monetary Policy Review round the
corner, the participating economists were asked what policy action, if any, they expected from the RBI.

The feedback received from majority of the participating economists indicates that we should be
prepared for another round of monetary tightening in the forthcoming policy review. It was mentioned
that with economic and industrial growth moving up the curve and with inflation now spreading to non-
food items as well, the RBI would in all probability tighten the monetary levers further. The majority
view amongst the surveyed economists is that while the repo and the reverse repo rate could be hiked
by 25 basis points each, the CRR may be increased by up to 50 basis points.

While a hike in the repo and reverse repo rates would affirm RBI’s commitment to rein in inflationary
expectations, a hike in the CRR by 50 basis points would remove liquidity to the tune of Rs. 25,000 crore
from the system. Evidently banks have been parking more than Rs. 1 lakh crore at the LAF window as
per latest available data and this indicates the comfortable liquidity position in the system.

The participating economists were also asked on what would be the impact on the interest rates if the
RBI tightens the monetary policy in the forthcoming policy review. The inputs received show that a
majority of the economists do not foresee an immediate hike in interest rates by the banks. As the
liquidity position in the system is quite comfortable, banks are likely to maintain the existing rates for a
few more months even if policy rates are increased by the RBI.

While the above is the majority view, there is a feeling amongst a smaller set of participants that banks
would go for an immediate hike in interest rates if the RBI increases the policy rates later this month.
And there are three reasons why this would happen –

Deposit rates of banks are already rising and this is putting pressure on the net interest margin
(NIM).
With effect from April 1, 2010 interest rates on saving accounts are being computed on a daily basis
and this has added, albeit marginally, to the cost of deposits for banks.
There was no tightening of interest rates by banks following the 25 basis points hike in repo and
reverse repo rate in March 2010. This time around banks are not likely to wait for long.

Although the majority view is that banks would not hike the interest rates immediately if the RBI
tightens the monetary policy, even if some increase in interest rates happens, majority of the
economists feel that this would not have too much of a bearing on the company’s bottom line. The
surveyed economists have mentioned that this will be on account of three factors –

Over time we have seen that members of corporate India have gone ahead and raised resources
from other channels – ECB, FCCB, etc. As the global economy improves, companies will be able to
tap these avenues in a better manner. With LIBOR rates still low, external borrowings are
economical as compared to raising funds from banks.

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 With the base rate framework coming into effect soon, it is expected that larger corporates in
particular may start looking at raising resources using CDs and Commercial Paper for meeting their
working capital requirements. Interestingly, the costs of funds from these sources for a period of
less than a year is better than the indicative base rates banks are likely to come out with.
Higher top line growth and robust market demand is going to negate the impact of higher borrowing
costs for companies.

Economists have mentioned that the burden of higher interest rates would be felt in case of MSMEs.
Going ahead, companies from interest rate sensitive sectors like retail, FMCG, consumer durables,
housing etc. are also likely to see some impact on their performance following a hike in interest rates.

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 FICCI Economic Outlook Survey – April 2010

♣ Economists’ views on resource mobilization by corporates for funding investments

The investment cycle in the economy is gaining momentum and this is reflected in the strong growth
seen in the capital goods industry. With Business Confidence on the upswing, it is expected that
companies would increasingly look at new investment projects as well as those that were shelved due to
the economic slowdown. Capacity utilization in the industry is at a reasonably high level and this should
also prompt companies to move ahead with capacity augmentation plans. However, all of this would
demand additional funds and FICCI asked the participating economists on how they see corporate India
funding their investment plans.

All the economists agreed that the capital expenditure / investment cycle is moving and going ahead
companies would use a mix of both domestic and external sources for raising funds to meet their
requirements.

On the external side, we can expect that more funds being raised through the ECBs, FCCBs, ADR / GDR
routes. Additionally, FDI flows would also contribute and help companies finance their investment plans.
Moreover, in the calendar year 2009 the IPO listing gained some momentum. With the FII flows
expected to continue moving in at reasonable levels, more and more companies would seek raising
resources from the equity market in the coming months.

Finally, the surveyed economists have also mentioned that reliance on bank financing will also increase
through the year 2010 and credit growth would pick up on this account. An associated development that
one needs to keep an eye on and which has been mentioned earlier relates to the base rate framework
that kicks in from July 1, 2010. Economists have mentioned that with sub-PLR lending being
discontinued, large corporates may look at raising funds using CDs and Commercial Paper.

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 FICCI Economic Outlook Survey – April 2010

♣ Economists’ views on feasibility of the Rs. 40,000 crore disinvestment target for 2010-11

In Union Budget 2010-11, the government has set a target of raising Rs. 40,000 crore through
disinvestment. The recent experience with regard to disinvestment of NTPC and NMDC has raised
concerns about the ability of the government to mop up such large quantum of resources through the
disinvestment route. In view of this, FICCI asked the participating economists for their views on the
feasibility of the disinvestment target set for the year 2010-11.

The majority view on the feasibility of the Rs. 40,000 crore disinvestment target is that this is an
ambitious target yet it could be achieved in the current year. According to economists who took part in
the survey, the government is committed to raising significant sums through the disinvestment route to
provide for the social spends on sectors like education and health as well as other welfare programmes.
However, this Rs. 40,000 crore target could be met only if –

The IPO/ FPO prices are aligned closer to market expectations.

The government goes for some big ticket issues such as those of BSNL, MMTC, SAIL, Hindustan
Copper Ltd etc. Many of these issues are fundamentally good and the appetite for good scrips would
only increase over the year.
The equity market continues to remain robust as seen in recent times. The downside risk seen by
some economists with regard to the performance of the equity market in the near term relate to the
sovereign debt crisis (as the one seen in case of Greece and a few other European countries) which
may crop up from time to time, tightening of the monetary policy by RBI later this month and
through the year and continuous upward movement in the oil prices. These three factors could
impact the buoyancy in the equity market and to that extent affect the amounts government could
potentially raise through the disinvestment route.

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 FICCI Economic Outlook Survey – April 2010

♣ Economists’ views on how government can raise additional financial resources in 2010-11

As already mentioned the government has huge committed expenses for sectors like health and
education. Additionally, the various flagship programmes of the government also call for significant
financial resources. In view of the huge financial requirements for meeting all its obligations, the
government has to make efforts to beef up the efficiency level in the taxation system as well as tap
sources like disinvestment. FICCI asked the participating economists on what measures the government
can take to raise more funds during the year 2010-11.

The feedback received from the surveyed economists reveals that in the current year a robust growth
path will automatically help shore up government’s revenues. Cutting down on subsidies and linking
prices of oil and oil products to the market were some suggestions that were received from a few
economists. Finally, there was a clear agreement amongst all survey respondents that the government
should push for quick implementation of the GST regime and the DTC regime as these are expected to
generate greater resources for the exchequer.

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 FICCI Economic Outlook Survey – April 2010

♣ Economists’ views on sustainability of recent export performance

After seeing negative growth for thirteen straight months beginning October 2008, India’s export
growth moved back to the positive territory in November 2009. And since then exports have grown
every month on a year on year basis. Is this growth in exports sustainable and does it reflect an
improvement in the global scenario? FICCI posed this question to participants in the Economic Outlook
Survey.

The feedback received from the participating economists reveals that the improvement seen in recent
months in the country’s export performance is certainly on account of a gradual recovery which the
global economy is witnessing. The improvement in growth is more pronounced in the Asian region as
compared to US and EU. Having said this, most of the economists also added a caveat that export
growth in recent months has come on the back of a low base and this ‘base effect’ would continue in the
first half of 2010-11.

On the sustainability of recent export performance the participating economists have expressed mixed
views.

The majority view is that outlook for exports is positive and we can expect exports to clock 15 percent
growth (median forecast) in 2010-11. It has been pointed out that as Asia now accounts for a sizable
part of India’s exports, growth in this region augurs well for our near term export performance.

While growth in the Asian region is expected to support India’s exports, the same cannot be said with
regard to western markets. According to a few economists FICCI spoke to, the recovery in western
economies is still fragile with unemployment levels in US, UK and Euro zone still very high. Consumption
levels in these markets are still quiet low and with rising oil prices it would get dented even further. With
sovereign defaults risks looming large and pressure on countries to undertake fiscal correction, how the
western markets can provide sizable demand remains a question. In addition to this, movement of the
Rupee vis-à-vis the Dollar and Euro would also have a bearing on exports. These are the risks for a
sustained pickup in India’s exports going forward.

Although recovery in the western markets is still fragile, most of the economists have ruled out a double
dip recession in these markets.

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 FICCI Economic Outlook Survey – April 2010

♣ Economists’ views on whether rising capital flows demand some policy action

In recent months capital inflows into the Indian market have increased at a fast pace. This follows the
slowdown and eventual reversal that was seen in FII flows when the global crisis was at its peak. Strong
capital flows into the Indian market have led to appreciation of the Rupee which is causing hardship for
the exporters as well as for those who are in the business of import substitution industries. Even
otherwise, large scale flows, particularly debt related and short term, can be a source of instability for
any economy.

Given the rising capital inflows, FICCI asked the participating economists to comment on whether these
are in line with the fundamentals of the Indian Economy and do these demand some policy action.

The majority view amongst economists is that capital flows into India are in line with the fundamentals
of the economy, particularly the buoyant domestic growth prospects, and do not warrant any policy
action at this point in time. The following points have been raised by the economists in support of their
argument for not taking any policy action on capital flows.

With oil prices rising, non-oil imports being robust and some slackness being seen in invisibles, the
current account gap is only going to widen. Additional capital, as it flows into the economy, will be
able to offset this widening gap in the current account.
Part of the rising capital flows is on account of the accommodative monetary policy conditions in
developed markets. As these economies normalize the policy conditions, it will lead to a slowing
down of funds flows to emerging market economies like India.
An economy like India requires significant capital to support its overall growth. Present level of flows
are well within the absorptive capacity of India. The challenge for the policy makers is to ensure that
these are channeled towards productive purposes.
With an ambitious disinvestment programme on the anvil, it is imperative that the government
takes no steps that could hurt sentiment of foreign investors.

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♣ Annual Forecasts for 2009-10

Key Macroeconomic Variables Annual Forecast 2009-10

Mean Median Max Min
1 GDP growth rate at factor cost (%) 7.2 7.2 7.5 6.8
Agriculture & Allied -0.3 -0.2 0.6 -1.3
Industry 9.5 10.0 10.5 7.5
Services 8.4 8.1 10.0 7.8
2 Fiscal Deficit (as % to GDP) Centre 6.7 6.7 6.9 6.5
3 Growth in IIP (%) 10.4 10.5 10.7 10.0
4 CPI-IW Inflation rate (%) (End March 2010) 15.0 15.5 17.5 12.3
5 Money Supply (M3) growth (%) 17.5 17.5 18.5 16.5
6 Merchandise Export growth (%) -8.2 -9.3 0.0 -12.5
7 Merchandise Import growth (%) -8.4 -9.5 -2.2 -12.0
8 Trade Balance (% to GDP) -8.7 -8.8 -7.3 -9.8
9 Bank credit growth (%) 16.0 16.5 16.8 14.0
FICCI Economic Outlook Survey – April 2010

Annual Forecasts for 2010-11

Key Macroeconomic Variables Annual Forecast 2010-11

Mean Median Max Min
1 GDP growth rate at factor cost (%) 8.5 8.4 9.0 8.0
Agriculture & Allied 4.0 4.0 5.0 2.5
Industry 9.4 9.2 11.0 8.5
Services 9.6 9.3 12.0 8.8
2 Fiscal Deficit (as % to GDP) Centre 5.7 5.8 6.0 5.5
3 Growth in IIP (%) 10.1 10.0 11.5 8.2
4 WPI Inflation rate (%) (End March 2011) 5.7 5.5 7.0 5.0
5 CPI-IW Inflation rate (%) (End March 2011) 8.2 8.5 10.0 6.0
6 Money Supply (M3) growth (%) 19.4 19.6 21.0 17.3
7 Merchandise Export growth (%) 13.1 15.0 17.6 3.5
8 Merchandise Import growth (%) 12.4 12.0 18.0 7.0
9 Trade Balance (% to GDP) -8.3 -8.3 -7.0 -10.5
10 US$ / INR exchange rate (End March 2011) 43.0 43.25 40.50 44.00
11 Bank credit growth (%) 20.1 19.0 23.0 18.0
FICCI Economic Outlook Survey – April 2010

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♣ Quarterly Forecasts for Q4 (Jan-Mar) of 2009-10 and Q1 (Apr-Jun) of 2010-11

Key Macroeconomic Variables Quarterly Forecasts

2009-10 Q4 (Jan -Mar) 2010-11 Q1 (Apr-Jun)
Mean Median Max Min Mean Median Max Min
1 GDP growth rate at factor cost (%) 8.4 8.7 9.2 7.2 8.3 8.9 9.3 6.5
Agriculture & Allied -0.1 -0.5 2.0 -2.0 2.6 3.0 4.0 1.0
Industry 12.4 12.9 15.4 7.5 10.5 11.0 13.5 7.3
Services 9.3 8.8 11.8 7.9 9.1 9.2 10.2 8.0
2 Growth in IIP (%) 15.0 15.2 16.8 12.0 11.9 13.0 15.9 6.2
3 WPI Inflation rate (%) - - - - 9.2 9.3 10.0 8.5
4 CPI-IW Inflation rate (%) 15.2 15.4 16.0 14.0 11.2 11.8 14.5 6.6
5 Money Supply (M3) growth (%) 18.1 18.1 18.1 18.0 17.5 17.5 18.0 17.0
6 Merchandise Export growth (%) 23.9 22.6 36.5 13.7 31.0 23.2 52.5 17.2
7 Merchandise Import growth (%) 46.8 46.7 62.5 32.7 34.0 22.2 67.5 12.5
8 Trade Balance (% to GDP) -7.8 -7.3 -5.5 -10.5 -6.4 -6.8 -5.0 -7.5
9 US$ / INR exchange rate - - - - 44.80 44.75 44.0 45.5
10 Bank credit growth (%) 16.6 16.6 17.1 16.0 16.8 16.6 18.1 16.0
FICCI Economic Outlook Survey – April 2010

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