Economic Advisory Council projects 7.1% growth for 2011-12

MoM Team / Mumbai, Feb 22, 12:24 PM

Economic Advisory Council to the Prime Minister has released the 'Review of the Economy 2011-12'. Earlier in July 2011, it had released the 'Economic Outlook for 2011-12'. The lasted document is includes the revisions to the projections made in earlier document.



The key highlights are as follows:



- GDP growth for 2011-12 scaled down to 7.1% from earlier estimate of 8.2% in August 2011



- GDP growth projection is better compared to 7.0% from RBI and 6.9% from CSO



- Gross fixed Capital formation (GFCF) for 2011/12 to slip 400 bps to 29.3%



- Manufacturing and construction may show improvement in the last quarter.



- Strong growth in the services sector will continue



- CAD for the 2011/12 is projected to be 3.6%.



- Headline inflation is projected to be around 6.5% at the end of March 2012



-Government must strive to contain and improve the efficacy of subsidies.



Prospects for 2012/13



- GDP growth at 7.5 to 8%. Mining and manufacturing to show substantial improvement



- Inflationary pressure will continue to ease and will remain around 5-6% for the year.



- Vigil to be kept on food prices



- Greater need to invest in infrastructure for both capacity creation and operational performance



- CAD projected at around 3.0% of GDP.



- Need to keep the CAD between 2.0-2.5% over the medium term.



-Government must effectively lay out a road map to achieve fiscal consolidation.



 

Source: Capital Market