A survey sponsored by the Reserve Bank has revised the country’s economic growth projections for the current fiscal to 8.7 per cent, from 8.5 per cent earlier. Forecasters have revised their real GDP growth rate forecasts upwards to 8.7 per cent in 2010-11, from 8.5 per cent in the last survey.

The higher forecast is driven mainly by increased agricultural growth and growth in services,” said the report of RBI’s 14th Round of Professional Forecasters.

The forecast for agriculture growth this fiscal has been revised upwards to 5 per cent, from 4.6 per cent in the last survey.

For industry, the growth forecast has been maintained at 9 per cent, while for services, it has been revised from 9.1 per cent to 9.6 per cent.

Clarifying that the survey does not represent the views of the RBI, the central bank said the forecasters have pegged inflation at 6-6.9 per cent by the end of this fiscal, as against its own projection of 7 per cent.

The forecasters expect economic growth to be 8.7 per cent next fiscal, lower than the government’s 9 per cent estimate.

“Forecasters have assigned the highest (36.7 per cent) chance that it will fall in 6.0-6.9 per cent in end-March of 2010-11,” the survey said.

While inflation rose to 8.43 per cent in December, from 7.48 per cent in the previous month, the economy grew by 8.9 per cent in the first half of the current fiscal.

The survey said that the economy will clock 8.9 per cent growth in the third quarter (October-December), marginally higher than 8.7 per cent projected in the last forecast.

In the fourth quarter of 2010-11, the GDP growth is placed at 8.5 per cent, also revised upwards from 8.3 per cent projected in the last round of survey.

Meanwhile, Finance Minister Pranab Mukherjee on Wednesday exuded confidence that the economy will grow by 8.5 per cent this fiscal. The industrial growth slowed to a 18-month low of 2.7 per cent in November.

However, the output of the six core infrastructure industries grew by 6.6 per cent in December, 2010, vis-a-vis 6.2 per cent expansion in the year-ago period. Economist said this healthy growth will have a positive impact on December’s Index of Industrial Production (IIP).

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