New Delhi: Buoyed by better than expected
GDP growth of 7.9 percent in the second quarter, the Reserve
Bank on Monday said it will have to raise the country`s growth
outlook for 2009-10 from the current estimates of 6 percent.
"Clearly this (Q2 GDP growth of 7.9 percent) is better
news than we could have expected, and we will have to review
forecast for the year as a whole," RBI depty governor Subir
Gokarn told reporters at the Finance Ministry.
However, he stopped short of giving a new estimate,
saying the recovery was mainly driven by government spending
and it was premature to forecast without knowing the impact of
the monsoon on the third quarter figures.
"We shouldn`t ignore the fact that it is still currently
being driven substantially by public spending ... a recovery
will only be sustained if private sector through consumption,
investment and exports starts to stabilise," he said.
Though he said signs of private sector stabilising were
there, one could draw comfort about the durability of recovery
only after the transition takes place from the government-led
to private sector-led recovery.
Even as he expects a negative agricultural growth for the
third quarter, Gokarn said the economic stimulus cannot remain
permanently and the next move, whenever happens, would surely
indicate the government`s exit.
"It`s not a boom yet but it is indicating that we don`t
need to be in a sort of permanent stimulus mode ... the next
move, whenever it comes will indicate a change (in monetary
policy)," he said.