Dun & Bradstreets economy forecast for June 2014 which predicts GDP to grow by 5.2% in Q1 FY14.
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.
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