An RBI report says Omicron could be more of a flash flood than a wave
Mumbai:
India’s overall economic activity remains strong, driven by an upbeat consumer confidence and growth in bank credit and most importantly, hopes that Omicron may turn into a “sudden flood rather than a wave”, further brightening prospects. The Reserve Bank of India (RBI) has mentioned in its bulletin of January 2022.
“On the vaccination front, India has made rapid progress. On the Omron edition, recent data from the UK and South Africa shows that such infections are 66 to 80 percent less severe with less need for hospitalization ” State of the economy published in the RBI Bulletin said.
It noted that amid pick-up in consumer and business confidence and bank credit, aggregate demand conditions remain resilient, while on the supply front, rabi sowing has exceeded last year’s level and normal acreage.
Noting that several categories of manufacturing and services are in expansion, the article said, “overall economic activity in India remains strong, with buoyant consumer and business confidence and an increase in several high-frequency indicators to come”.
“The expectation is that Omicron may become more of a flash flood than a wave, which has brightened near-term prospects,” it said.
The central bank said the views expressed in the article are those of the authors and do not necessarily represent the views of the RBI.
There are signs that supply chain disruptions and shipping costs are gradually easing, although inflation may take longer to subside. This provides an opportunity to focus all energies on accelerating and broadening global recovery, the article said.
It also said that figures for early January 2022 (as of January 12) indicate an increase in digital payments, although the recent surge in infections “could be a concern going forward”. Nevertheless, the payment industry is expected to exhibit flexibility due to the availability of various checkout options and growing digital.
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