RBI survey upbeat on corporate profits

RBI survey upbeat on corporate profits
The Hindu Business Line, November 17, 2009, Page 1

Our Bureau, Mumbai

The professional forecasters’ survey of the Reserve Bank of India is bullish about the corporate sector’s profitability in the current financial year.

In the latest survey, the profit growth of the corporate sector in 2009-10 has been revised upwards to 10 per cent from 7.5 per cent in the earlier survey. The survey, however, marginally lowered the corporate sector profit growth for 2010-11 marginally to 14.5 per cent from 15 per cent in the last survey.

However, the survey has notched down the real GDP growth by 50 basis points to 6 per cent.

GDP growth

The RBI, in its second quarter Review of the Monetary Policy, projected a GDP growth of six per cent in 2009-10 with an upside bias by assuming a modest decline in agricultural production and a faster recovery in industrial production. The upward revision comes on the back of a firm recovery in industrial output.

According to the latest Central Statistical Organisation data, industrial production, comprising major sectors such as manufacturing, electricity generation and mining, grew 9.1 per cent in September higher than the 6.03 per cent growth recorded in the same month last year.

Out of the 21 respondents in the ninth round of survey, majority of them assigned a GDP growth range of 6-6.4 per cent for 2009-10 and 7.5-7.9 per cent for 2010-11.

Forecasters’ median estimates for Wholesale Price Index based inflation in the third and fourth quarters of current financial year have been revised upwards to 4 (2.5 per cent last survey) and 6.8 per cent (5.4 per cent), respectively. Majority of the forecasters feel that inflation will be in the 6-6.9 per cent range in 2009-10 and 5-5.9 per cent in 2010-11.