RBI sees upward bias to FY10 GDP growth estimate

On current assessment, the growth projection for GDP for 2009-10 is placed at 6% with an upward bias, the RBI said while announcing the first quarter review of the annual monetary policy. This updated growth projection for 2009-10, thus, marks a slight improvement over the growth expectations of around 6% indicated in the Annual Policy Statement in April, the central bank said.

There are now signs of an upturn in industrial production and revival of credit demand, though the delayed monsoon has increased the downside risks to agricultural production, the RBI said. The growth projection for the current year reflects the absence of any firm signs of definite recovery in the world economy, it added. The challenge is to return the economy to the high growth rate of 9% that we averaged in the period 2005-08, the RBI said.

In 2008-09, real GDP increased by 6.7%, in line with the projection in the RBI's Annual Policy Statement. However, the growth pattern was uneven as real GDP growth decelerated from 7.7% in the first half of the year to 5.8% in the second half.