Warning that the worst may not be over yet, Mr D Subbarao Reserve Bank Governor has said the global economic recession may not only continue through 2009 but could prolong to the next year as well.

Mr Subbarao at the International Monetary Fund-World Bank spring meetings said that "Even with current levels of policy intensity, the trough of the global recession is not seen until the end of 2009 and could get pushed out further if the policy responses fail to gain traction.”

Leading the Indian delegation to the International Monetary and Financial Committee meet in Washington, he said India is expected to grow at 6.5 to 6.7% in 2008-09 and the real GDP growth for 2009-10 would be about 6%.

A statement by RBI further quoted Mr Subbarao as saying that "The most frequently asked question today is whether the worst is behind us. While there are incipient signs of business confidence and consumer spending trying to gain toehold, rising unemployment, high inventories and financial stress weigh heavily on overall demand conditions.”

He said that RBI's policy response was aimed at containing the contagion from the global financial crisis while maintaining comfortable domestic and forex liquidity as it launched three fiscal stimulus packages apart from other measures.

(Sourced from Financial Express)