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Good monsoon to propel agriculture GDP to 7-8 percent: SBI | Canindia News

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Good monsoon to propel agriculture GDP to 7-8 percent: SBI

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CanIndia New Wire Service 0 comments

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Mumbai, April 14 (IANS) With an above normal monsoon being forecast for this year, the country’s agricultural GDP is likely to witness a robust performance, to even touch 7-8 percent, said a State Bank of India (SBI) report on Thursday.

“We believe the agricultural GDP is most likely to witness a robust performance in 2016-17 and may even touch 7-8 percent mark because of IMD projections amid the government’s plan to lift agriculture sector,” said the report, adding the development may pull up the baseline GDP by as much as 50 basis points.

It also highlighted that there were also times when agriculture GDP grew even when there was deficient rainfall. “In 2003 and 2010 agriculture GDP expanded by an average of 8.5 percent following years of poor rainfall,” it said.

About inflation, the report said it estimates Consumer Price Index (CPI) inflation trajectory to be significantly benign in 2016-17.

“We maintain that over a point of time as pulse prices decelerate, the pace of price increase will come down,” said the report.

“This in turn means RBI will have more firepower to cut rates possibly by up to 50 basis points. Also, with central India, the home to pulses, forecast to receive adequate rainfall in FY17, will only strengthen our case,” it said.

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