RBI may revise economic growth projection downwards

December 10th, 2008 - 11:34 pm ICT by IANS  

Kolkata, Dec 10 (IANS) Reserve Bank of India (RBI) Governor D. Subbarao said here Wednesday that the country’s central bank may revise downwards the economic growth projection for 2008-09.” The IMF (International Monetary Fund) has revised its forecast for global growth and also growth of emerging economies significantly, and reflecting that we would be doing our own numbers in our policy estimates in January,” Subbarao said, emerging from a meeting with West Bengal Chief Minister Buddhadeb Bhattacharjee in the state’s secretariat building.

The apex bank projected gross domestic product (GDP) growth rate of 7.5-8 percent in 2008-09 at its mid-term monetary policy review in October. But finance ministry and planning commission officials are of the opinion that the GDP growth for the current fiscal is expected to be close to 7 percent.

The RBI will go for third quarter monetary policy review Jan 27.

“Year 2008-09 is a difficult year and 2009-10 would also be a difficult year, perhaps more difficult,” Subbarao said.

He said the economy would see “painful adjustments” despite the fiscal measures.

“India, of course will get impacted by the global financial crisis. The RBI and the government have taken a number of measures to minimise its impact. Even so there will be period of painful adjustments,” Subbarao said.

Regarding inflation, the RBI governor said the recent slashing of petroleum product prices as well as cut in excise duties will have “a positive impact on the decline in inflation”.

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