Key Points:
- On November 26, Reserve Bank of India’s (RBI) Governor, Shaktikanta Das said that the Indian economy has shown an unexpected kickstart towards recovery.
- “We need to be vigilant about the sustainability of demand after festivals and a possible reassessment of market expectations surrounding the vaccine,” Das said.
- Regulatory reforms have moved the financial markets to the next trajectory amid the pandemic and affirmed RBI’s commitment to ensure an orderly conduct in the markets.
On Thursday, November 26, Reserve Bank of India’s (RBI) Governor, Shaktikanta Das said that the Indian economy has shown an unexpected kickstart towards recovery. The recovery is seen after a 23.9% contraction in GDP in Q1. The governor also warned that downside risks to growth continue due to a surge in Covid-19 infections.
“After witnessing a sharp contraction in the economy by 23.9 per cent in Q1 and a multi-speed normalization of activity in Q2, the Indian economy has exhibited stronger than expected pick-up in momentum of recovery,”
Das said.
The warning of the governor was based on the Covid-19 numbers that India saw on Wednesday. Around 44,000 Covid-19 cases were recorded in India on Wednesday that took the tally to 92.6 lakh with over 1.35 lakh deaths.
“We need to be vigilant about the sustainability of demand after festivals and a possible reassessment of market expectations surrounding the vaccine,”
Das said.“Even as the growth outlook has improved, downside risks to growth continue due to recent surge in infections in advanced economies and parts of India,”
added Shaktikanta Das.
Key Points:
- Downside risks to growth continues because of the recent rise in the infections in parts of Europe and some parts of India.
- The sustainability of demand after the festive season must be looked upon and an idea of the market should be considered surrounding the vaccine.
- Regulatory reforms have moved the financial markets to the next trajectory amid the pandemic and affirmed RBI’s commitment to ensure an orderly conduct in the markets.
- India will continue to approach capital account convertibility as a process, rather than as an event within a broad macroeconomic framework.
