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Key Economic Forecast

GDP to grow by 5.2% in Q1 FY14

Detailed Commentary
Dun & Bradstreet
June 2014
Two consecutive years of significant slowdown along with a host of domestic unresolved issues has placed a burden on the new
government. The upcoming Union Budget would broadly reveal how the new government plans to steer the economy out of the
current slowdown. Currently, India needs a robust fiscal policy to build the framework for a sustainable growth. We assume
reassessing the quality of expenditure should be a priority along with rebalancing the composition of expenditure with the focus
shifting more towards capital expenditure said Dr. Arun Singh Senior Economist Dun & Bradstreet India. Dr. Singh further
added that The fiscal year 2014-15 is expected to start with an optimistic GDP growth of 5.2% in Q1 FY15 as some of the current
macroeconomic numbers strengthens hope that the recovery for the Indian economy is underway he added.
Inflation WPI
Inflation CPI (Combined)
Exchange Rate (`/US$)
IIP Growth
15-91 day's T-Bills
10 year G-Sec yield
Bank Credit*
Dun & Bradstreet's Macro Economic Forecasts
Forecast Latest Period
All figures are monthly averages *Refers to End period
Previous Period
6.0%-6.2% Jun-14 6.0% May-14 5.2% Apr-14
8.3%-8.5% Jun-14 8.3% May-14 8.6% Apr-14
59.70-59.90 Jun-14 59.31 May-14 60.36 Apr-14
3.0%-4.0% May-14 3.4% Apr-14 -0.5% Mar-14
8.4%-8.5% Jun-14 8.5% May-14 8.8% Apr-14
8.7%-8.9% Jun-14 8.8% May-14 8.9% Apr-14
13.5%-14.0% Jun-14 13.0% May-14 13.8% Apr-14
Real Economy: Pick up in the optimism level among the India Inc is likely to be reflected in the upcoming industrial
production data. Moreover, the low base effect is expected to play a major role in keeping the
growth number of the Index of Industrial Production (IIP) uplifted during the month of May-14. IIP is
expected to have grown by 3.0%-4.0% during May-14.
Price Scenario: Both the CPI and WPI inflation is likely to edge up as the global crude oil prices have shot up owing
to civil unrest in Iraq. Moreover, inflationary pressures remain high given the prospect of
sub-normal monsoon during the current year. D&B expects the headline WPI inflation to remain
elevated at 6.0%-6.2% during June-14.
Money & Finance: Concerns over inflationary pressures and tightening of liquidity in the banking system is expected
to keep the yields in the bond market, both the short term as well as the long term, elevated in the
near term. D&B expects 15-91 day T-Bill yield to average at around 8.4%-8.5% and 10-year
G-sec yield at around 8.7%-8.9% during June-14.
External Sector: Rupee is likely to remain under pressure during the month of June-14 given the rise in crude oil
prices following the political instability in Iraq and risk aversion by investors. D&B expects the
rupee to depreciate and be around 59.70-59.90 per US$ during June-14.