Economy placed slightly better; can grow 6.5%: RBI survey

Updated on Jul 27, 2009 08:10 PM IST

Ahead of its credit policy review on Tuesday, the Reserve Bank of India in a survey has revised up its GDP forecast for FY10 to 6.5 per cent from 5.7 per cent as estimated earlier.

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PTI | By, Mumbai

RBI on Monday revised its economic growth forecast to 6.5 per cent for this fiscal, saying the situation is better than what was perceived in April though the conditions are not enough to fuel a global recovery.

The RBI Professional Forecasters Survey, sponsored by the central bank, had forecast 5.7 per cent economic expansion in April but the June numbers reflect a pick-up in economic activity.

The forecast is part of the macro-economic report by the RBI, which said signs of revival in the global financial conditions seen in Q1 of FY'10 are necessary, but were not sufficient to induce a firm global recovery.

The central bank estimates comes a day ahead of the quarterly review of credit policy.

Visible signs of price pressures pose complex challenges for the conduct of monetary policy, particularly given the dampened domestic demand conditions, the Reserve Bank said.

Wholesale price-based inflation was (-) 1.2 per cent as on July 11 mainly due to base effect, even as most commodity prices have moved up sharply.

Consumer price inflation remained high in the range of 8.6-11.5 per cent during May-June 2009 on a YoY basis as compared with 8-9.7 per cent in March, the RBI said, noting that hike in motor fuel prices was fuelling price rise.

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