Fairval

Notes on Indian equities, sectors and economy

RBI – Head in the sand?

Posted by fairval on October 25, 2008

RBI, in its credit policy statement yesterday says GDP will grow 7.7%.

Not clear why most forecasters are trying to maintain close to 8% growth rates. An HDFC report says IIP grew 4.9% in April-Aug’08, or in the first 5 months of FY09. Sep onwards is when the AIG’s and Lehmans of the world started faltering. So I find it hard to imagine how manufacturing growth will be better in the remaining 7 months. So we may be looking at IIP growth for FY09 of say 4% or so. If RBI thinks services sector has no slowdown, it seems to have its head in the sand!

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