NEW DELHI JAN. 7 . The Reserve Bank of India today projected that the Indian economy was likely to grow 7 per cent plus in the current fiscal year. Also, inflation would be benign in the range of 4 to 4.5 per cent. The RBI Governor, Yaga Venugopal Reddy, utilised the forum of the Federation of Indian Chambers of Commerce and Industry (FICCI) annual general meeting here to provide his update on the economy, particularly after the Central Statistical Organisation put the second quarter growth of the economy at 8.4 per cent. Normally, the RBI updates its economic projections twice a year, in April and November when its presents a review of the monetary and credit policies. Conforming that "India is shining'' and that there was confidence in the economy, Dr. Reddy said the RBI had upgraded its April projection for gross domestic product (GDP) growth of 6 per cent to 6.5-7 per cent in November 2003. But the impressive real GDP growth of 8.4 per cent in the second quarter had placed India firmly among the fastest growing economies in the world during the current year. "It is reasonable to expect that unless there are unforeseen circumstances, the overall GDP growth for 2003-04 as a whole was likely to be around 7 per cent, with a continued upward bias,'' Dr. Reddy said, implying that growth could actually be higher than 7 per cent. On inflation, the RBI Governor said with inflation at 5.6 per cent as on December 20, 2003, the rising trend in the last two months had not been unexpected but the magnitude of the price rise had been above original expectation. Dr. Reddy attributed this to the increase in the prices of fruits, vegetables, mineral oils, fuels and cotton textiles. Also, international oil prices had remained firm and the outlook for the near-term remained uncertain. Second, world primary commodity prices had also increased in 2003. Still, the Indian economy had three favourable factors to counter these recent global trends. First, it was expected in the normal course that inflation would fall in the mid-January to March 2004 period. Second, food stocks and ample foreign exchange reserves provided a cushion. Third, the Indian economy had, in recent years, shown remarkable resilience in absorbing shocks, including on the oil front, the RBI Governor said. The Governor, therefore, concluded that while the assumption in April 2003 was 5-5.5 per cent inflation, the latest assessment placing it in the range of 4-4.5 meant that the overall inflationary situation continued to be benign for 2003-04. For industry, the Governor had a clear message. "Assuming that there are no unexpected adverse developments, there is merit in maintaining the status quo as far as the monetary and credit policy measures are concerned, while pursuing the reforms process.'' ---------------------------------------------------------------------- Email From ""Rajendra S. Pai" <rajendra.pai@xxxxxxxxx>" was security checked by 3.90 version of CxProtect(tm) On: mail_store at: 08:23:15, 08-Jan-2004 Thursday ---------------------------------------------------------------------- *************************************************************************** Mailing list (sbinews@xxxxxxxxxxxxx) related information: News/articles about SBI and Banking related matters published in the print media, Internet etc will be circulated through this Mailing List. The messages in this list will help in improving awareness of SBI and its activities vis-a-vis the happenings in the Banking industry. This should be of help to all staff members of SBI, particularly those who are preparing for promotional written tests/interviews/group discussions. Subscription to this Mailing List is simple and FREE. Please check the procedure below. Please share this information with other colleagues/branches that could be interested in subscribing to this Mailing List. The messages circulated here should not be deemed to have the official endorsement of the SBI or any of its employees. The correct factual position may be ascertained from official sources. To join this mailing list, just send an email to sbinews-request@xxxxxxxxxxxxx with the word 'subscribe' without the quotes in the subject of the email message. To leave this mailing list, just send an email to sbinews-request@xxxxxxxxxxxxx with the word 'unsubscribe' without the quotes in the subject of the email message. Archives (old messages) are available for viewing at: //www.freelists.org/archives/sbinews Click on the month-year at the lower left corner to view messages posted during that month. This is an announcements/newsletter type mailing list i.e. only the Moderator/s can post messages to the list. This mailing list is maintained and moderated by Sri. R.S.Pai, currently working as Chief Manager(IT-Internet Banking), SBI, Corporate Centre, Mumbai. Visit http://rspai.tripod.com for some useful Banking, Reference and Utilities Links