Economy to grow 8.7% in 2010-11, finds survey

India’s gross domestic product (GDP) is expected to grow 8.7 per cent in the year, according to the Reserve Bank of India’s professional forecasters’ survey conducted in December. The previous survey showed a growth rate of 8.5 per cent. Improvement in exports, buoyant demand, a rise in volume of sales and new orders were factors that provided a boost to overall expectations. But persistently high rate of inflation can dent growth.  “The outlook for growth remains buoyant. The inflation persistence, led by stubbornly high food inflation, in double digits for close to two years, however, remains a major concern,” said RBI in its macroeconomic outlook, released a day before the third quarter review of the monetary and credit policy. On the brighter side, the survey results suggest manufacturers expect selling prices and profit margins to increase despite expectations of rising input costs, which reflect their pricing power. The survey says better agricultural production is expected on the back of satisfactory monsoon and reservoir levels. The survey revised growth estimate for the agricultural sector from 4.6 per cent to five per cent.