But capital goods production came down once again, durables good production has not picked up however good auto sales suggest that perhaps that may augur good consumption numbers going forward.


"The monsoon is better than initially thought, exports growth has picked up. But what remains is the investment growth to pick up. Credit numbers haven't picked up as strongly, but part of the reason might be that corporations are using financial markets - the bond and external commercial borrowing markets," the Governor told a bankers summit organised by FICCI here.


Due to lower output from mines, utilities and factories, the July factory output data came down to 0.5 percent year-on-year, the government data showed on Friday, down from June's revised 3.9 percent rise. This makes the April-July IIP data at a low 3.3 percent.


"The bottom line is that while the macro indicators are improving we still have some way to go before we can declare we are out of the woods," Rajan said.


However, he expressed hope that a stable government at the Centre will enable the economy stand out when compared to other emerging market peers.


In the quarter to June, the economy expanded by a more-than-expected 5.7 percent, igniting hopes of a recovery as in the past two fiscals the GDP grew by sub-5 percent.

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