An RBI report stated that Omicron may be more like a flash flood than a wave
Mumbai:
India’s overall economic activity remains strong, boosted by upbeat consumer confidence and increased bank credit and most importantly, with expectations that Omicron could become a “flash flood”. not a wave,” shed more light on the outlook, the Reserve Bank of India (RBI) noted in its newsletter for January 2022.
“In terms of vaccination, India has made rapid strides. Regarding the Omicron variant, recent data from the UK and South Africa suggest that such infections are 66 to 80% less severe, with a lower need for hospitalization,” said an article on the state of the economy published in the RBI Bulletin.
Against the backdrop of upbeat consumer and business confidence and increased bank credit, aggregate demand conditions remain resilient while based on supply, rabi seeding has exceeded last year’s levels and the average acreage remains unchanged. Usually, it notes.
Noting that the manufacturing sector and some service categories are still expanding, the article adds that “overall economic activity in India remains strong, with consumer and business confidence remaining strong.” optimism and an uptick in several high-frequency indicators to come”.
“Expectations that Omicron could be more of a flash flood than a wave have shed some light on the short-term outlook,” it said.
The central bank said the views expressed in the paper are those of the authors and do not necessarily represent those of the RBI.
There are signs that supply chain disruptions and transportation costs are gradually easing, although the waning of inflation may take longer. This provides an opportunity to focus all resources on accelerating and expanding the global recovery, the article said.
It also says that data for early January 2022 (to January 12) shows growth in digital payments, although the recent increase in infections “could cause concern in future”. However, the payments industry is expected to show resilience due to the increasing availability of diverse and digital payment options.
