Second Semi-Annual Medium-Term Agricultural Outlook Report

The current projections of improved global economic growth performance for the current year and stronger growth in 2014 are positive signs for agricultural sector. The International Monetary Fund (IMF), in its April 2013 World Economic Outlook, projected world GDP to expand by 3.3 per cent in 2013 as compared to 3.2 per cent in 2012. The GDP growth has been projected to increase to 4.0 per cent in 2014 and further to 4.5 per cent in 2018. This recovery in global growth is expected to support growth in demand for food commodities in the medium-term of next 5-10 years.

India’s overall economic growth in the current year is expected to be again moderate following a similar performance in 2012–13 when GDP increased by 5 per cent in constant prices. The medium-term prospects of higher growth are consistent with the global growth recovery although it may fall short of the earlier expectations of annual average growth rate of 8 per cent. The inflation pressures are also expected to moderate over the medium-term. In the case of advanced economies, IMF projects annual consumer price inflation of 2.0 per cent over the medium-term as compared to projected 1.7 per cent in 2013 and 2 per cent in 2014. In the emerging market and developing economies, consumer price inflation is projected to decline from 5.9 per cent in 2013 to 4.8 per cent in 2018.

This higher economic growth and moderate rate of inflation provide a favourable macroeconomic environment for agricultural sector’s own performance in the medium term.

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