CONSENSUS FORECAST. India April Contributors INDIA 2 CALENDAR 18 NOTES 20

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1 CONSENSUS FORECAST INDIA 2 CALENDAR 1 NOTES 2 PUBLICATION DATE 24 March 21 FORECASTS COLLECTED 1 March - 23 March 21 INFORMATION AVAILABLE Up to and including 23 March 21 NEXT EDITION 2 Contributors ARNE POHLMAN Chief Economist ARMANDO CICCARELLI Head of Research RICARDO ACEVES Senior Economist RICARD TORNÉ Senior Economist OLGA COSCODAN Economist CARL KELLY Economist TERESA KERSTING Economist DIRINA MANÇELLARI Economist ANGELA BOUZANIS Economist CECILIA SIMKIEVICH Economist MIRIAM DOWD Editor

2 LONG-TERM TRENDS 3-year averages Population (million): 1,227 1,27 1,327 GDP (USD bn): 1,7 2,3 3,41 GDP per capita (USD): 1,2 1,4 2,97 GDP growth (%): Fiscal Balance (% of GDP): Inflation (%): Current Account (% of GDP): External Debt (% of GDP): Outlook improves GDP slowed slightly in the quarter from October December, growing 7.% year-on-year. More recent data paint a cloudy picture of the economy. Industrial production eased in January and the manufacturing PMI fell in February indicating slowing economic momentum. However, on the flip side, the services PMI rose and the trade deficit shrank in February. Meanwhile, Finance Minister Arun Jaitley presented the budget for fiscal year 21/21 on 2 February. While it contains a number of potentially beneficial policies, including increased spending on infrastructure and significant tax reforms, it fell short of introducing any groundbreaking changes. While s economic outlook remains fairly stable, recent revisions to the national accounts methodology and the revised historical data are lifting the forecast. FocusEconomics panelists raised their projections by. percentage points this month. The panel now expects GDP to increase 7.1% in FY 21/21. For FY 21/217, the panel sees the economy expanding 7.%. Inflation rose from.1% in January to.4% in February, according to the recently-revised CPI series. In an unscheduled meeting on 4 March, the Central Bank decided to reduce the repurchase rate by 2 basis points from 7.7% to 7.%. The Central Bank also announced that it had signed an agreement with the government outlining a clear inflation-targeting framework for monetary policy. Panelists expect inflation to average.% in FY 21/21. In FY 21/217, the panel expects inflation to average.7%. Angela Bouzanis Economist POLITICS Modi delivers pragmatic, albeit lacklustre budget for FY 21/1 Nine months after Prime Minister Narendra Modi s Bharatiya Janata Party (BJP) achieved an overwhelming election victory as a result of a campaign centered on deregulating business and fostering foreign direct investment, the government presented its first full-year budget on 2 February. While the USD 29 billion budget for FY 21/1 fell short of sky-high expectations for large reforms, it included a number of positive policy announcements focused on boosting economic growth and creating a more business friendly-environment. Overall, the budget signaled the government s commitment to achieving high economic growth rates, while pushing the pace of fiscal consolidation back slightly. One of the budget s main, and largely-expected, highlights was the planned increase in spending on infrastructure and defense. The government increased spending targets to 2.% of GDP, up from last year s 1.9% of GDP. The quality of country s infrastructure is poor and greater expenditure on roads and railways is badly needed to jumpstart the economy. In this regard, Finance Minister Arun Jaitley stated that five ultra-mega power projects will be constructed to ease s chronic energy shortages. Notably, Jaitley FocusEconomics Consensus Forecast 2

3 Union Budget Fiscal Year 21/1 INR Million % of GDP 1 Revenue Receipts 1,141,7-2 Tax Revenue (net to centre) 919,42-3 Non-Tax Revenue 221,733-4 Capital Receipts 3,92 - Recoveries of Loans 1,73 - Other Receipts 9, - 7 Borrowings and other liabilities,49 - Total Receipts 1,777,477-9 Non-Plan Expenditure 1,312,2-1 On Revenue Account of which, 1,2,27-11 Interest Payments 4,14-12 On Capital Account 1, Plan Expenditure 4, On Revenue Account 33,2-1 On Capital Account 13,27-1 Total Expenditure 1,777, Revenue Expenditure 1,3,47-1 Of Which, Grants for creation of 11,1 Capital Assets - 19 Capital Expenditure 241,43-2 Revenue Deficit 394, Effective Revenue Deficit 23, Fiscal Deficit, Primary Deficit 99,4 -.7 Notes: Union Budget for fiscal year 21/1. Source: Ministry of Finance. announced that only part of the increased infrastructure expenditure would be financed directly from the budget; the rest will come from public sector undertakings and other internal sources. To fill part of this funding gap, the government announced that it would launch tax-free infrastructure bonds, as well as establish a National Investment and Infrastructure Fund. Successful implementation and financing will be key going forward. Another positive aspect of the budget are the policies aimed at improving the ease of doing business and monetizing taxes. Jaitley emphasized the government s commitment to implementing the upcoming Goods and Services Tax (GST) in April 21 as well as creating more transparent and simplified tax laws moving forward. The government pledged to gradually reduce the corporate tax rate from 3% to 2% over the next four years and to remove some of the current exemptions. In addition, a modern bankruptcy law was tabled and a law against black money was outlined which, if successful, could reduce tax evasion. The government also outlined a number of proposals to encourage savings, such as tax incentives for payments toward pensions and insurance premiums. Yet, despite all the increased dynamism and reforms Modi s government pledged, Jaitley failed to deliver in a few areas. In particular, he failed to outline a comprehensive roadmap on how to reform s subsidy schemes, which account for 1.% of GDP. The subject is politically unpopular, which may explain its absence from the budget. In addition, the government pushed back its target of lowering the deficit to 3.% of GDP from FY 21/217 to FY 217/21. For FY 21/21, the government is targeting a fiscal deficit of 3.9%, up from the previous 3.% target expected in the FY 214/21 budget. Radhika Rao, Economist at DBS adds: Overall, the improved expenditure mix and realistic revenue assumptions bode well for the FY 1/1 fiscal position. What is lacking is a clearer timeline to lower subsidies, optimistic privatization and indirect tax targets. Any disappointment on the growth front and / or a rebound in fuel prices could add to the stress on the fiscal books. Against this backdrop, FocusEconomics Consensus Forecast panelists foresee a fiscal deficit of 4.% for FY 21/21. For 21/217, the panel expects a deficit of 3.7%. Purchasing Managers Index 4 PMI Manufacturing PMI Services Threshold 4 Feb-13 Aug-13 Feb-14 Aug-14 Feb-1 Note: HSBC Purchasing Managers Index (PMI). A reading above indicates an expansion in business activity while a value below points to a contraction. Source: HSBC and Markit. The Central Bank sees the economy growing.% in FY 21/21. Although s outlook remains fairly stable, a recent revision to national accounts methodology and revised historical data is lifting the forecast. FocusEconomics panelists expect GDP to grow 7.1% in FY 21/21, which is up. percentage points from last month s forecast. For FY 21/217, the panel sees economic growth at 7.%. REAL SECTOR Manufacturing PMI eases while services improves The HSBC manufacturing Purchasing Managers Index (PMI) fell to 1.2 in February from 2.9 in January. February s result marked the second consecutive monthly drop and a five-month low. The PMI is now closer to the -threshold that separates expansion from contraction in business activity in the manufacturing sector. According to HSBC, the drop was driven by a deterioration in all five components of the index. Weaker growth was recorded for output and new orders. In addition, employment levels fell in February and backlogs of work rose. HSBC pointed out that, [m]anufacting growth in lost momentum FocusEconomics Consensus Forecast 3

4 in February, with output and new orders expanding at softer rates than those seen in the past four months. Meanwhile, the services PMI rose to 3.9 in February from January s 2.4. The figure marked an eight-month high and indicates that business activity in services continues to expand. According to HSBC, the increase in February stemmed from strong new business growth during the month. FocusEconomics Consensus Forecast panelists see fixed investment rising.% in FY 21/1, which is down.3 percentage points from last month s estimate. For 21/217, the panel expects fixed investment to increase 7.%. Industrial Production variation in % 1 % Year-on-year Annual average REAL SECTOR Industrial production eases in January In January, industrial production expanded 2.% compared to the same month last year. The reading was below December s revised 3.2% growth (previously reported: +1.7% year-on-year), but overshot the.7% expansion the market had expected. The slowdown in January was broad-based. Manufacturing production rose 3.3% over the same month last year, which was below December s 3.% rise. Mining contracted 2.% in January, which followed December s 2.1% fall. In addition, production of electricity slowed. - Jan-13 Jul-13 Jan-14 Jul-14 Jan-1 Note: Year-on-year and annual average variation of industrial production index in %. Source: Ministry of Statistics and Programme Implementation (MOSPI) and FocusEconomics calculations. On a use-based classification, the figure was driven by a deterioration in the production of consumer goods, basic goods and intermediate goods. In contrast, the production of capital goods accelerated in January. Despite the slowdown, the trend improved. Annual average growth in industrial production rose from 1.7% in December to 1.9% in January. FocusEconomics panelists expect industrial production to increase.7% in fiscal year 21/21, which is up. percentage points from last month s forecast. For fiscal year 21/217, the panel expects industrial output to expand 7.%. Inflation Wholesale and Consumer Price Index MONETARY SECTOR Wholesale prices tumble in February, while inflation rises Consumer prices in February increased.1% over the previous month, which contrasted January s zero growth. The monthly result mainly reflected higher prices for alcoholic beverages and tobacco as well as for housing and fuel. Inflation rose from January s.1% to.4% in February, which was above the.2% that markets had expected. 1. %. -1. CPI - Month-on-month (left scale) CPI - Year-on-year (right scale) WPI - Year-on-year (right scale) Feb-13 Aug-13 Feb-14 Aug-14 Feb-1 Note: Annual and monthly variation of consumer price index (CPI) and annual variation of wholesale price index (WPI) in %. Source: Ministry of Commerce and Industry and FocusEconomics calculations. % 4 FocusEconomics Consensus Forecast panelists expect consumer price inflation to average.% in FY 21/21, which is down.2 percentage points from last month s forecast. For FY 21/217, the panel expects consumer price inflation to average.7%. The wholesale price index (WPI) in February decreased 1.4% over the previous month, which was notably below the revised.22% fall observed in January (previously reported: -.3% month-on-month). February s fall came on the back of a large decrease in fuel prices which stem from the recent sharp fall in global oil prices. Decreases were also recorded for the prices of foods articles and manufactured prices. FocusEconomics Consensus Forecast 4

5 Wholesale prices in February fell 2.1% over the same month last year, which followed January s.4% decrease and marked the steepest decrease on record. February s print was below the.% fall the markets had expected. As a result of the subdued reading, annual average WPI inflation fell from 3.3% in January to 2.7% in February. FocusEconomics Consensus Forecast panelists expect wholesale price inflation to average 1.% in FY 21/21, which is down.2 percentage points from last month s forecast. In FY 21/217, the panel expects wholesale price inflation to average 4.%. MONETARY SECTOR Reserve Bank cuts interest rates unexpectedly In an unscheduled meeting on 4 March, the Reserve Bank of (RBI) decided to reduce the repurchase rate by 2 basis points, from 7.7% to 7.%. The move was unexpected by market analysts and came after the Bank s decision to hold the repurchase rate at its 3 February meeting. In order to maintain the corridor at which monetary policy rates move, the Bank also decided to cut the marginal standing facility rate (Bank rate) from.7% to.% and the reverse repurchase rate from.7% to.%. MSF, Repo and Reverse Repo Rates in % % 7 MSF Rate Repo Rate Reverse Repo Rate Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-1 Note: Reserve Bank of (RBI) Marginal Standing Facility (MSF) Rate, Repo Rate and Reverse Repo Rate in %. Source: Reserve Bank of (RBI). Commenting on the decision, the Central Bank recognized that recent economic data have confirmed disinflationary pressures. Further, the new consumer price index has showed that inflationary pressures are evolving as anticipated by the Reserve Bank last year, although at a faster pace than predicted. The monetary authorities explained that uncertainties surrounding the inflation outlook remain as oil prices have risen in recent weeks and food prices will be influenced by the south-west monsoon. In addition, the government s actions on food management will be significant in determining the inflation forecast. Regarding the recent revision to GDP statistics, the Central Bank pointed out that the new information presents a picture of a robust economy. However, the recently-released estimate is at odds with other economic indicators and anecdotal evidence on the state of the economy. Despite the contradiction, the Bank believes the overall portrait of a steadily recovering economy is accurate. In addition, the Central Bank commented on the recently released Union Budget. The monetary authorities stated that many of the structural reforms contained in the Budget will improve supply over the medium term. In the near term, the Central Bank estimates that aggregate demand will be boosted by the one-year postponement of fiscal consolidation to a 3% target. Concern remains regarding the large borrowings planned for the public sector. Moreover, the government has pledged to compensate for the postponement by improving the quality of fiscal adjustment going forward. In addition, the government and the Central Bank signed a memorandum outlining clear inflation objectives and stating that fiscal and monetary policy will work together in a complementary method. In conclusion, the Central Bank summarized that low inflation figures combined with some still-weak data in economic indicators justify its monetary policy action. The Bank added that the need for an unscheduled decision was prompted by the weak state of certain sectors of the economy and the release of the agreement on monetary policy framework. Looking forward, the Central Bank stated its target of lowering the inflation rate to 4% by the end of a twoyear period beginning in FY 21/217. In addition, the RBI explained that, FocusEconomics Consensus Forecast

6 further monetary actions will be conditioned by incoming data, especially on the easing of supply constraints, improved availability of key inputs such as power, land, minerals and infrastructure, continuing progress on high-quality fiscal consolidation, the pass through of past rate cuts into lending rates, the monsoon outturn and developments in the international environment. FocusEconomics panelists project that the repurchase rate will average 7.1% at the end of FY 21/21. For FY 21/217, panelists see the repurchase rate ending the year at 7.%. Merchandise Trade % EXTERNAL SECTOR Trade deficit shrinks in February More recent data related to s external sector showed that the trade deficit totaled USD. billion in February, which was below the USD.3 billion shortfall observed in the same month last year. February s result represents the lowest deficit in 17 months. In the 12 months up to February, the trade deficit recorded USD 13. billion, which narrowed slightly from the USD billion shortfall recorded in the 12 months up to January. -19 Trade Balance (USD bn, left scale) Exports (yoy, right scale) Imports (yoy, right scale) Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Aug-14 Feb-1 Note: 12-month sum of trade balance in USD billion and annual variation of the 12-sum of exports and imports in %. Source: Ministry of Commerce and Industry and FocusEconomics calculations. -2 The narrowing in the trade deficit showed that imports contracted 1.7% annually in February, which followed the 11.4% fall registered in January. The reading, which marked a 12-month low, was largely the result of the sharp decline in oil prices. Accordingly, oil imports totaled USD.1 billion, which represented a.% decrease compared to the same month of the previous year. Meanwhile, exports contracted 1.% year-on-year in February (January: -11.2% year-on-year). FocusEconomics Consensus Forecast panelists expect exports to increase 4.9% in FY 21/21, reaching USD 341 billion. In FY 21/217, the panel sees exports expanding.7% and reaching USD 371 billion. FocusEconomics Consensus Forecast

7 Economic Indicators FY 21/11-219/2 21/11 211/12 212/13 213/14 214/1 21/1 21/17 217/1 21/19 219/2 Real Sector Population (million) 1,19 1,211 1,227 1,243 1,2 1,27 1,293 1,31 1,327 1,34 GDP per capita (USD) 1,427 1,3 1,9 1,11 1,79 1,2 2,3 2,291 2,2 2,91 GDP (USD bn) 1,7 1,93 1,2 1,7 2,11 2,33 2,3 3,1 3,427 3,924 GDP (INR bn) 77,41,32 99, 113,41 124,9 13,23 12,4 17,4 19,97 213,9 Economic Growth (Nominal GDP, ann. var. in %) Economic Growth (GDP, annual var. in %) Private Consumption (annual var. in %) Fixed Investment (annual variation in %) Agriculture (annual variation in %) Industry (annual variation in %) Services (annual variation in %) Industrial Production (annual variation in %) Fiscal Balance (% of GDP) Public Debt (% of GDP) Monetary and Financial Sector Money (annual variation of M2 in %) Inflation (CPI, annual variation in %, aop) Inflation (WPI, annual variation in %, aop) RBI Repurchase Rate (%, eop) Day Treasury Bill (%, eop) Year Bond Yield (%, eop) Stock Market (var. of BSE SENSEX in %) Exchange Rate (INR per USD, eop) Exchange Rate (INR per USD, aop) External Sector Current Account Balance (% of GDP) Current Account Balance (USD bn) Trade Balance (USD bn) Exports (USD bn) Imports (USD bn) Exports (annual variation in %) Imports (annual variation in %) International Reserves (USD bn) International Reserves (months of imports) External Debt (USD bn) External Debt (% of GDP) Quarterly Data Q4 14 Q1 1 Q2 1 Q3 1 Q4 1 Q1 1 Q2 1 Q3 1 Q4 1 Q1 17 Economic Growth (GDP, annual var. in %) Business Confidence Index Inflation (CPI, annual variation in %, aop) Inflation (WPI, annual variation in %, aop) RBI Repurchase Rate (%, eop) Year Bond Yield (%, eop) Exchange Rate (INR per USD, eop) Current Account Balance (% of GDP) Current Account Balance (USD bn) Trade Balance (USD bn) Exports (USD bn) Imports (USD bn) Exports (annual variation in %) Imports (annual variation in %) Monthly Data May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-1 Feb-1 Industrial Production (annual variation in %) HSBC Manufacturing PMI (-threshold) HSBC Services PMI (-threshold) Inflation (CPI, mom variation in %) Inflation (CPI, annual variation in %) Inflation (WPI, mom variation in %) Inflation (WPI, annual variation in %) Exchange Rate (INR per USD, eop) Trade Balance (USD bn) Exports (annual variation in %) Imports (annual variation in %) Ministry of Statistics and Programme Implementation (MOSPI) released new national accounts data on 9 February, which introduced a new methodology and shifted the base year of calculation from 24/ to 211/12. Historical series have been revised according to the new methodology and it affects all variables related to GDP. Some forecasts may not yet reflect these changes. On 12 February, MOSPI released new consumer price index data, which introduced a new methodology and rebased from 21 to 212. CPI data from January 21 and forward is taken from this new series. FocusEconomics Consensus Forecast 7

8 Real Sector Gross Domestic Product 1 Real GDP var. in % 2 Real GDP Q1 12-Q4 1 var. in % Real GDP growth in % World - 3 GDP 21/1 evol of forecasts % 4% 3% 2% 1% Maximum Consensus Minimum 4 GDP 21/1 Panelist Distribution 1 4 World 2 Q1 12 Q1 13 Q1 14 Q1 1 Q1 1 4 GDP 21/17 evol of forecasts 1 Maximum Consensus Minimum 4 Individual Forecasts 21/1 21/17 Allianz ANZ.3 7. BBVA Research.. Berenberg.. BofA Merrill Lynch.3 7. Capital Economics.. CII 7. - Citigroup Global Mkts.1.4 Credit Agricole Credit Suisse.1.9 Crisil DBS Bank 7..3 Deutsche Bank EIU..7 Frontier Strategy Group. 7. Goldman Sachs.3. HSBC 7..3 Ratings and Research. - ING 7.7. JPMorgan Kotak Securities Morgan Stanley.3. NCAER. - Nomura 7..3 Oxford Economics Société Générale Standard Chartered 7.7. UBS 7..3 United Overseas Bank Summary Minimum.. Maximum.1.9 Median Consensus History 3 days ago. 7. days ago days ago.2.7 Additional Forecasts IMF (Mar. 21) 7. - ADB (Dec. 214).3 - Central Bank (Feb. 21). - % < > 9. Notes and sources General: All annual data refer to fiscal year (April-March). Long-term chart period from 2/1 to 219/2 unless otherwise stated. All real sector data are from the Ministry of Statistics and Programme Implementation (MOSPI). IMF forecasts refer to calendar year. Forecasts based on FocusEconomics Consensus Forecast. 1 GDP, real annual variation in %. 2 Quarterly GDP (not seasonally adjusted), year-on-year variation in %. Quarters correspond to calendar year (i.e. Q1=Jan.-Mar.) 3 GDP, evolution of 21/1 forecasts during the last 1 months. 4 GDP, evolution of 21/17 forecasts during the last 1 months. GDP, panelist distribution of 21/1 forecasts. Concentration of panelists in forecast interval in %. Higher columns with darker colors represent a larger number of panelists. FocusEconomics Consensus Forecast

9 Real Sector Additional forecasts Consumption and Investment Consumption variation in % Investment variation in % Individual Forecasts 21/1 21/17 21/1 21/17 Allianz ANZ BBVA Research Berenberg BofA Merrill Lynch Capital Economics CII Citigroup Global Mkts Credit Agricole Credit Suisse Crisil DBS Bank Deutsche Bank EIU Frontier Strategy Group Goldman Sachs HSBC Ratings and Research ING JPMorgan Kotak Securities Morgan Stanley NCAER Nomura Oxford Economics Société Générale Standard Chartered UBS United Overseas Bank Summary Minimum Maximum Median Consensus History 3 days ago days ago days ago Consumption variation in % Consumption evolution of fcst 21/1 21/17 7 Investment variation in % Investment evol. of forecasts 7 Notes and sources All annual data refer to fiscal year (April-March). Long-term chart period from 2/1 to 219/2 unless otherwise stated. All real sector data are from the Ministry of Statistics and Programme Implementation (MOSPI). Forecasts based on FocusEconomics Consensus Forecast. Private consumption, annual variation in %. 7 Private consumption, evolution of 21/1 and 21/17 forecasts during the last 1 months. Gross fixed investment, annual variation in %. 9 Gross fixed investment, evolution of 21/1 and 21/17 forecasts during the last 1 months. 21/1 21/17 FocusEconomics Consensus Forecast 9

10 Real Sector Additional forecasts Industry and Fiscal Balance Industry Fiscal Balance variation in % % of GDP Individual Forecasts 21/1 21/17 21/1 21/17 Allianz ANZ BBVA Research Berenberg BofA Merrill Lynch Capital Economics CII Citigroup Global Mkts Credit Agricole Credit Suisse Crisil DBS Bank Deutsche Bank EIU Frontier Strategy Group Goldman Sachs HSBC Ratings and Research ING JPMorgan Kotak Securities Morgan Stanley NCAER Nomura Oxford Economics Société Générale Standard Chartered UBS United Overseas Bank Summary Minimum Maximum Median Consensus History 3 days ago days ago days ago Industry variation in % Industry evol. of forecasts 21/1 21/ Fiscal Balance % of GDP Fiscal Balance evol. of forecasts /1 21/ Notes and sources All annual data refer to fiscal year (April-March). Long-term chart period from 2/1 to 219/2 unless otherwise stated. All real sector data are from the Ministry of Statistics and Programme Implementation (MOSPI) and the Ministry of Finance. See below for details. Forecasts based on FocusEconomics Consensus Forecast. 1 Industrial production, annual variation in %. Source: MOSPI. 11 Industrial production, evolution of 21/1 forecasts during the last 1 months. 12 Central government balance as % of GDP. Source: Ministry of Finance. 13 Central government balance as % of GDP, evolution of 21/1 forecasts during the last 1 months FocusEconomics Consensus Forecast 1

11 Monetary Sector Inflation Inflation annual variation of consumer price index and wholesale price index in % Consumer Prices variation in % Wholesale Prices variation in % Individual Forecasts 21/1 21/17 21/1 21/17 Allianz ANZ BBVA Research Berenberg BofA Merrill Lynch Capital Economics CII Citigroup Global Mkts Credit Agricole Credit Suisse Crisil DBS Bank Deutsche Bank EIU Frontier Strategy Group Goldman Sachs HSBC Ratings and Research ING JPMorgan Kotak Securities Morgan Stanley NCAER Nomura Oxford Economics Société Générale Standard Chartered UBS United Overseas Bank Summary Minimum Maximum Median Consensus History 3 days ago days ago days ago CPI in % CPI Inflation 21/1 evol of fcst Maximum Consensus Minimum 4 1 CPI Inflation 21/17 evol of fcst 7 1 Maximum Consensus Minimum 4 17 WPI in % 1 Notes and sources All annual data refer to fiscal year (April-March). Long-term chart period from 2/1 to 219/2 unless otherwise stated. All monetary sector data are from the Ministry of Commerce and Industry. Forecasts based on FocusEconomics Consensus Forecast. 14 Inflation, annual average variation of consumer price index (CPI) in %. 1 CPI inflation, evolution of 21/1 forecasts during the last 1 months. 1 CPI inflation, evolution of 21/17 forecasts during the last 1 months. 17 Inflation, annual average variation of wholesale price index (WPI) in %. 4 2 FocusEconomics Consensus Forecast 11

12 Monetary Sector Interest Rate 1 Interest Rate in % 19 Interest Rate Q1 12-Q4 1 in % Q1 12 Q1 13 Q1 14 Q1 1 Q1 1 2 Int. Rate 21/1 evol of fcst 21 Int. Rate 21/17 evol of fcst 9 9 Maximum Consensus Minimum 7 7 Maximum Consensus Minimum 22 Interest Rate 21/1 Panelist Distribution % 4% 3% Interest Rate RBI Repurchase Rate Individual Forecasts 21/1 21/17 Allianz - - ANZ BBVA Research 7.. Berenberg - - BofA Merrill Lynch Capital Economics 7. - CII.7 - Citigroup Global Mkts Credit Agricole Credit Suisse Crisil - - DBS Bank - - Deutsche Bank 7. - EIU - - Frontier Strategy Group - - Goldman Sachs HSBC Ratings and Research - - ING JPMorgan Kotak Securities 7. - Morgan Stanley. - NCAER - - Nomura Oxford Economics - - Société Générale Standard Chartered 7. - UBS.7. United Overseas Bank 7. - Summary Minimum.. Maximum Median Consensus History 3 days ago days ago days ago % 1% % < > 7.7 Notes and sources All annual data refer to fiscal year (April-March). Long-term chart period from 2/1 to 219/2 unless otherwise stated. All monetary sector data are from the Reserve Bank of (RBI). Forecasts based on FocusEconomics Consensus Forecast. 1 Interest rate, RBI Repurchasing Rate in % (eop). 19 Quarterly interest rate, RBI Repurchasing Rate in % (eop). 2 Interest rate, evolution of 21/1 forecasts during the last 1 months. 21 Interest rate, evolution of 21/17 forecasts during the last 1 months. 22 Interest rate, panelist distribution of 21/1 forecasts. Concentration of panelists in forecast interval in %. Higher columns with darker colors represent a larger number of panelists. FocusEconomics Consensus Forecast 12

13 Monetary Sector Exchange Rate 23 Exchange Rate INR per USD 24 Exchange Rate INR per USD 4 3 Q1 12 Q1 13 Q1 14 Q1 1 Q1 1 2 INR per USD 21/1 evol of fcst 2 INR per USD 21/17 evol of fcst Maximum Maximum Consensus Consensus Minimum Minimum INR per USD 21/1 Panelist Distribution % 4% 3% Exchange Rate INR per USD Individual Forecasts 21/1 21/17 Allianz ANZ BBVA Research Berenberg - - BofA Merrill Lynch Capital Economics 7. - CII - - Citigroup Global Mkts Credit Agricole. - Credit Suisse Crisil 2. - DBS Bank.7 - Deutsche Bank 4. - EIU Frontier Strategy Group - - Goldman Sachs HSBC 4.. Ratings and Research 3. - ING JPMorgan. - Kotak Securities Morgan Stanley NCAER - - Nomura Oxford Economics Société Générale 9.. Standard Chartered 1. - UBS 3.. United Overseas Bank. - Summary Minimum Maximum.7.3 Median Consensus History 3 days ago days ago days ago % 1% % < > 9. Notes and sources All annual data refer to fiscal year (April-March). Long-term chart period from 2/1 to 219/2 unless otherwise stated. All monetary sector data are from Thomson Reuters. Forecasts based on FocusEconomics Consensus Forecast. 23 Exchange rate, INR per USD (eop). 24 Quarterly exchange rate, INR per USD (eop). 2 Exchange rate, evolution of 21/1 forecast during the last 1 months. 2 Exchange rate, evolution of 21/17 forecast during the last 1 months. 27 Exchange rate, panelist distribution of 21/1 forecasts. Concentration of panelists in forecast interval in %. Higher columns with darker colors represent a larger number of panelists. FocusEconomics Consensus Forecast 13

14 External Sector Current Account and Trade Balance Current Account and Trade Balance Current Account Trade Balance % of GDP USD bn Individual Forecasts 21/1 21/17 21/1 21/17 Allianz ANZ BBVA Research Berenberg BofA Merrill Lynch Capital Economics CII Citigroup Global Mkts Credit Agricole Credit Suisse Crisil DBS Bank Deutsche Bank EIU Frontier Strategy Group Goldman Sachs HSBC Ratings and Research ING JPMorgan Kotak Securities Morgan Stanley NCAER Nomura Oxford Economics Société Générale Standard Chartered UBS United Overseas Bank Summary Minimum Maximum Median Consensus History 3 days ago days ago days ago Current Account % of GDP 1-3 Trade Balance USD bn 4 29 Current Account evol. of fcst /1 21/17-4 Trade Balance Imports Exports Trade Balance evol. of forecasts -1 21/1 21/17-1 Notes and sources All annual data refer to fiscal year (April-March). Long-term chart period from 2/1 to 219/2 unless otherwise stated. All external sector data are from the Reserve Bank of (RBI) and the Ministry of Commerce and Industry. See below for details. Forecasts based on FocusEconomics Consensus Forecast. 2 Current account balance, as % of GDP. Source: RBI. 29 Current account balance, evolution of 21/1 and 21/17 forecasts during the last 1 months. 3 Trade balance, exports and imports, in USD. Source: Ministry of Commerce and Industry. 31 Trade balance, evolution of 21/1 and 21/17 forecasts during the last 1 months FocusEconomics Consensus Forecast 14

15 External Sector Exports and Imports Exports and Imports Exports Imports USD bn USD bn Individual Forecasts 21/1 21/17 21/1 21/17 Allianz ANZ BBVA Research Berenberg BofA Merrill Lynch Capital Economics CII Citigroup Global Mkts Credit Agricole Credit Suisse Crisil DBS Bank Deutsche Bank EIU Frontier Strategy Group Goldman Sachs HSBC Ratings and Research ING JPMorgan Kotak Securities Morgan Stanley NCAER Nomura Oxford Economics Société Générale Standard Chartered UBS United Overseas Bank Summary Minimum Maximum Median Consensus History 3 days ago days ago days ago Exports variation in % Exports evolution of fcst 4 21/1 21/ Imports variation in % Imports evol. of forecasts 7 Notes and sources All annual data refer to fiscal year (April-March). Long-term chart period from 2/1 to 219/2 unless otherwise stated. All external sector data are from the Ministry of Commerce and Industry. Forecasts based on FocusEconomics Consensus Forecast. 32 Exports, annual variation in %. 33 Exports, evolution of 21/1 and 21/17 forecasts during the last 1 months. 34 Imports, annual variation in %. 3 Imports, evolution of 21/1 and 21/17 forecasts during the last 1 months. 21/1 21/17 4 FocusEconomics Consensus Forecast 1

16 External Sector Additional forecasts International Reserves and External Debt Int. Reserves External Debt USD bn USD bn Individual Forecasts 21/1 21/17 21/1 21/17 Allianz ANZ BBVA Research Berenberg BofA Merrill Lynch Capital Economics CII Citigroup Global Mkts Credit Agricole Credit Suisse Crisil DBS Bank Deutsche Bank EIU Frontier Strategy Group Goldman Sachs HSBC Ratings and Research ING JPMorgan Kotak Securities Morgan Stanley NCAER Nomura Oxford Economics Société Générale Standard Chartered UBS United Overseas Bank Summary Minimum Maximum Median Consensus History 3 days ago days ago days ago Int. Reserves months of imports Int. Reserves evolution of fcst 4 21/1 21/ External Debt % of GDP External Debt evol. of forecasts 21/1 21/17 Notes and sources All annual data refer to fiscal year (April-March). Long-term chart period from 2/1 to 219/2 unless otherwise stated. All external sector data are from the Reserve Bank of (RBI). Forecasts based on FocusEconomics Consensus Forecast. 3 International reserves, months of imports. 37 International reserves, evolution of 21/1 and 21/17 forecasts during the last 1 months. 3 External debt as % of GDP. 39 External debt, evolution of 21/1 and 21/17 forecasts during the last 1 months. 4 FocusEconomics Consensus Forecast 1

17 FOCUSECONOMICS Fact Sheet General Data Official name: Republic of Capital: New Delhi (22.7 m) Other cities: Greater Mumbai (19.7 m) Kolkata (14.4 m) Bangalore (.m) Area (km2): 3,27,23 Population (million, 214 est.): 1,2 Population density (per km2, 214 est.): 33.2 Population growth rate (%, 214 est.): 1.3 Life expectancy (years, 214 est.): 7. Illiteracy rate (%, 2): 37.2 Language: Hindi, English and 21 other official languages Measures: Metric system Calendar: Year begins on 21 or 22 March of Gregorian calendar Time: GMT+.3 Economic Infrastructure Telecommunication (213) Telephones - main lines (per 1 inhabitants): 2.3 Telephones - mobile cellular (per 1 inhabit.): 7. Internet Users (per 1 inhabitants): 1.1 Broadband Subscriptions (per 1 inhabitants): 1.2 Energy (212) Primary Energy Production (trillion Btu): 1,74 Primary Energy Consumption (trillion Btu): 23,91 Electricity Generation (billion kw-h): 1,2 Electricity Consumption (billion kw-h): Oil Consumption (thousand bpd): 3,4 CO2 Emmissions (million metric tons): 1,31 in the Region Population %-share in Asia Vietnam 2.7% Other Philippines 7.% 3.% Indonesia 7.% China 41.1% Economic Structure % Indonesia.% Korea 7.9% GDP %-share in Asia Taiwan 3.1% Other 11.% 12.4% China.% GDP by Sector share in % GDP by Expenditure share in % Agriculture Industry Services Net Exports Investment Government Consumption Private Consumption Transportation (213) Airports: 32 Railways (km): 3,974 Roadways (km): 4,9,42 Waterways (km): 14, Chief Ports: Mumbai, Chennai, Kolkata Trade Structure -2 Primary markets share in % Political Data Prime Minister: Narendra Modi Last elections: 7 April - 12 May 214 Next elections: 219 Central Bank Governor: Raghuram Rajan Long-term Foreign Currency Ratings Other 4.3% Exports China.% U.S.A. 12.2% EU % Other Asia ex-japan 17.7% Other 4.4% LatAm.% Switzerland.2% U.S.A..1% Imports China 1.7% EU % Other Asia ex-japan 1.% Agency Rating Outlook Moody s: Baa3 Stable S&P: BBB- Stable Fitch Ratings: BBB- Stable Primary products share in % Strengths Huge domestic market Skilled labor force in key industries, particularly software High catch-up growth potential Weaknesses Excessive bureaucracy Protectionist trade policy Weak infrastructure.. Mineral Fuels 19.1% Food 1.2% Other 7.7% Exports Manufact. Products 3.% Mineral Fuels 41.4% Ores & Metals.% Imports Other.% Manufact. Products 44.2% FocusEconomics Consensus Forecast 17

18 Economic Release Calendar Calendar Date Country Event 24 March China March HSBC Manufacturing PMI 24 March Vietnam March Consumer Prices (**) 2 March Korea Q4 214 National Accounts 2 March Taiwan Central Bank Meeting (**) 2 March Korea March Consumer Confidence 2 March Philippines Central Bank Meeting 2 March Vietnam Q1 21 National Accounts (**) 2 March Vietnam March Industrial Production (**) 3 March Korea April Business Confidence 31 March Hong Kong February Retail Sales 31 March Korea February Industrial Production 31 March New Zealand March Business Confidence 31 March Thailand February Manufacturing Production 31 March Thailand February Merchandise Trade 1 April China March Manufacturing PMI 1 April Indonesia March HSBC Manufacturing PMI 1 April Indonesia March Consumer Prices 1 April Korea March HSBC Manufacturing PMI 1 April Korea March Consumer Prices 1 April Taiwan March HSBC Manufacturing PMI 1 April Vietnam March HSBC Manufacturing PMI 2 April Hong Kong March HSBC PMI 2 April March HSBC Manufacturing PMI 2 April Malaysia March Consumer Prices 2 April Singapore March SIPMM Manufacturing PMI (**) 2 April Thailand March Consumer Prices 3 April Malaysia Febuary Merchandise Trade April March HSBC Services PMI 7 April Australia February Retail Sales 7 April Australia Central Bank Meeting 7 April Central Bank Meeting 7 April Philippines March Consumer Prices 7 April Singapore Q1 21 National Accounts (**) April Philippines February Exports April Taiwan March Merchandise Trade April Taiwan March Consumer Prices 9 April Australia March Unemployment 9 April China March Merchandise Trade (**) 9 April Korea Central Bank Meeting 1 April Australia April Consumer Confidence (**) 1 April China March Consumer Prices 1 April China March Producer Prices 1 April China March New Yuan loans (**) FocusEconomics Consensus Forecast 1

19 Economic Release Calendar Calendar Date Country Event 1 April China March Money Supply (M2) (**) 1 April February Industrial Production 1 April March Consumer Prices 1 April Malaysia Febuary Industrial Production 1 April Singapore Central Bank Meeting (**) 14 April March Wholesale Prices 14 April Indonesia Central Bank Meeting 14 April Indonesia February Retail Sales (**) 1 April China Q1 21 National Accounts 1 April China March Industrial Production 1 April China March Retail Sales 1 April China March Fixed Asset Investment 1 April Indonesia March Merchandise Trade 1 April Philippines February OFW Remittances 17 April March Merchandise Trade (**) 17 April Singapore March Merchandise Trade 1 April China March Property Prices 2 April Korea March Merchandise Trade 2 April New Zealand April Business Confidence (**) 2 April New Zealand Q1 21 Consumer Prices 21 April Hong Kong March Consumer Prices 22 April Australia Q1 21 Consumer Prices 23 April China April HSBC Manufacturing PMI 23 April Korea Q1 21 National Accounts (*) 23 April Singapore March Consumer Prices 23 April Taiwan March Industrial Production 24 April Korea April Consumer Confidence 24 April Taiwan Central Bank Meeting (**) 2 April Vietnam April Consumer Prices (**) (*) Preliminary estimate. (**) Approximate date. FocusEconomics Consensus Forecast 19

20 Notes and Statements PUBLICATION NOTE Consensus forecasts are mean averages of projections of economic forecasters surveyed by FocusEconomics for our monthly publication. Quarterly averages may not correspond to the annual figures due to different forecast panels. The GDP-weighted averages for the regional aggregates refer to economies surveyed by FocusEconomics on a monthly basis, and include the following countries: Asia (1 countries): Brunei, Cambodia, China, Hong Kong,, Indonesia, Japan, Korea, Laos, Malaysia, Myanmar, Philippines, Singapore, Taiwan, Thailand and Vietnam. Asia ex-japan (1 countries): Brunei, Cambodia, China, Hong Kong,, Indonesia, Korea, Laos, Malaysia, Myanmar, Philippines, Singapore, Taiwan, Thailand and Vietnam. Asean (Association of Southeast Asian Nations, 1 countries): Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), Philippines, Singapore, Thailand and Vietnam. NIEs (Newly Industrialized Economies, 4 countries): Hong Kong, Korea, Singapore and Taiwan. Weights are based on market exchange rates and reflect the latest forecasts on GDP growth, inflation and exchange rates. COPYRIGHT NOTE Copyright 21 FocusEconomics S.L. Duplication, reproduction, transmission, publication or redistribution in any form or by any means electronic, mechanical, or otherwise without prior written consent of FocusEconomics S.L. is strictly prohibited. Please cite source when quoting. All rights reserved under International Copyright Conventions. The FocusEconomics Consensus Forecast Asia is a monthly publication of FocusEconomics. Communications to the Editor or FocusEconomics in general should be addressed as follows: FocusEconomics S.L. Gran Via 7 E-1 Barcelona Spain tel: fax: info@focus-economics.com web: DISCLOSURE STATEMENT The FocusEconomics Consensus Forecast Asia ( Forecast ) is based on information obtained from sources believed to be reliable. FocusEconomics and the participating panelists ( Information Providers ) do not guarantee that the information supplied in the Forecast is accurate, complete or timely. The Information Providers do not make any warranties with regard to the results obtained from the Forecast. The Information Providers are not responsible for any errors or omissions, or for any injuries or damages resulting from the use of this information, including incidental and consequential damages. Recipients should not regard the Forecast as a substitute for the exercise of their own judgement. The recommendations made in the Forecast may be unsuitable for investors depending on their specific investment objectives and financial position. The Forecast has been prepared solely for informational purposes and is not a solicitation of any transaction or an offer to enter into any transaction. Any opinions expressed in this report are subject to change without notice and the Information Providers are under no obligation to update the information contained herein. FocusEconomics Consensus Forecast 2

21 FocusEconomics Consensus Forecast reports cover economic forecasts for over 1, unique indicators in 9 countries. Every monthly report includes the Consensus Forecast for each indicator covered. The Consensus Forecast, based on an average of the forecasts provided by the most reputable economic research authorities in the world, is the one number you can rely on to make important business decisions. WHY CHOOSE FOCUSECONOMICS REDUCE RISK SAVE TIME OPTIMIZE RESEARCH ANALYZE TRENDS ANTICIPATE DEVELOPMENTS Instantly diversify your intelligence portfolio with dozens of forecasts. Get just the information you need, all in one place. Streamline research efforts by utilizing our comprehensive survey of leading economists. Prepare for what may occur next by studying how forecasts have evolved over time. Gain key insight into political and economic developments in a country or region to assess the potential impact on business prospects. INDICATORS INCLUDED REAL SECTOR GDP per capita Economic Growth Consumption Investment Industrial Production Unemployment Rate Fiscal Balance Public Debt EXTERNAL SECTOR Current Account Trade Balance Exports Imports International Reserves External Debt REGIONS & COUNTRIES COVERED MONETARY & FINANCIAL SECTOR Money Inflation Rate Policy Interest Rate Exchange Rate ASIA PACIFIC Brunei, China, Cambodia, Hong Kong,, Indonesia, Korea, Laos, Malaysia, Myanmar, Philippines, Singapore, Taiwan, Thailand, Vietnam, Australia & New Zealand CENTRAL AMERICA & CARIBBEAN Belize, Costa Rica, Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Nicaragua, Panama, Puerto Rico and Trinidad & Tobago EASTERN EUROPE Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia, Slovenia, Turkey & Ukraine EURO AREA Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia & Spain LATIN AMERICA Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay & Venezuela MAJOR ECONOMIES G7 countries (United States, Canada, Japan, United Kingdom, France, Eurozone, Germany & Italy); BRIC overview (Brazil, Russia, & China); Switzerland MIDDLE EAST & NORTH AFRICA Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, United Arab Emirates, Yemen; South Africa NORDIC ECONOMIES Denmark, Finland, Iceland, Norway and Sweden FocusEconomics Gran Via 7, 1, Barcelona, Spain subscribers@focus-economics.com