Amid optimistic consumer and business confidence and an uptick in bank lending, aggregate demand conditions remain resilient while on the supply side, rabi sowings have risen above the level of the last year and the normal area, he noted.
Reserve Bank of India file photo. AFP
India’s overall economic activity remains strong, driven by optimistic consumer confidence and an increase in bank lending, and expectations that Omicron could prove to be a “flash flood rather than a wave” further boosted prospects. outlook, according to an RBI article.
“On the vaccination front, India has made rapid progress. On the Omicron variant, recent data from the UK and South Africa suggests these infections are 66-80% less severe, with less need for hospitalization,” the state of the economy article published in the RBI Bulletin said on Monday.
Amid optimistic consumer and business confidence and an uptick in bank lending, aggregate demand conditions remain resilient while on the supply side, rabi sowings have risen above the level of the last year and the normal area, he noted.
Noting that manufacturing and several service categories remain expanding, the article said that “overall economic activity in India remains strong, with optimistic consumer and business confidence and increases in several high-frequency incoming indicators.”
“Expectations that Omicron might turn out to be more of a flash flood than a wave have informed the near-term outlook,” he said.
The central bank said the opinions expressed in the article are those of the authors and do not necessarily represent the views of the Reserve Bank of India (RBI).
There are indications that supply chain disruptions and shipping costs are slowly declining, although the decline in inflation may take longer.
This provides a window of opportunity to focus all energies on accelerating and broadening the global recovery, according to the article.
He also said data for early January 2022 (through January 12) indicates growth in digital payments, although the recent surge in infections “may pose a concern going forward”.
Nevertheless, the payment industry is expected to show resilience due to the availability of varied payment options and the rise of digital.
Market estimates predict that the value of digital payments could triple from $300 billion in 2020-21 to $1 trillion by 2025-26.
