Macroeconomic Forecast India

BMI View: India's central bank governor Duvvuri Subbarao has indicated there may be a slight increase in government borrowings in Fiscal Year 2010/11 (April-March) owing to upcoming redemptions, adding to the country's already sizeable fiscal pressures. Finance Minister Pranab Mukjerjee aims to bring the central government budget deficit to 5.5% of GDP in FY2010/11 from the expected level of 6.8% of GDP in FY2009/10. We are slightly more pessimistic, however, forecasting central government deficits of -6.8% and -5.9% of GDP in FY2009/10 and FY2010/11, respectively.

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