>TAKEAWAYS FROM RBI FY09 ANNUAL REPORT

The real GDP growth moderated to 6.7% during FY09 after an average growth of 8.8% in the preceding 5iyears. In the light of severe global financial crisis and the subsequent recession, FY09 growth was commendable. The year witnessed interested dichotomy though. The H FY09 was characterized by rising inflation due to hardening international commodity and domestic food prices while the second half witnessed a sharp decline in inflation and economic activity impacted by deterioration in the macro environment. Responding to these worsening conditions, Government announced three stimulus packages and RBI opted for significant monetary expansion. With Q1 FY10 GDP growth at 6.1% yoy, the economy has started showing early signs of stablisation, albeit not recovery. Nevertheless, the RBI target of 6% growth in GDP for 2009-10 with upward bias is likely to be achieved.

• RBI currently faces multiple challenges
• FY10 GDP growth targeted at 6%

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