The Reserve Bank of India (RBI), governor, Shaktikanta Das stated the global economy has been crippled due to the COVID-19 pandemic. He went on to add the central bank’s monetary policy committee (MPC) had not anticipated that it was so severe.
In a press briefing, Das said, “The MPC is of the view that the macroeconomic impact of the pandemic is turning out to be more severe than initially anticipated, and various sectors of the economy are experiencing acute stress.”
The former economic secretary added that the impact of the shock has been worsened by the disruption in supply and contraction in demand. “Beyond the destruction of economic and financial activity, livelihood and health are severely affected,” he stressed.
He added for the whole year, there will be uncertainty which will impact the demand in the country. “For the year as a whole, there is still heightened uncertainty about the duration of the pandemic and how long social distancing measures are likely to remain in place and consequently, downside risks to domestic growth remain significant.”
Other than agriculture, other economic activities are more likely to remain depressed in the first quarter of 2020-21 in view of the extended lockdown. “Even though the lockdown may be lifted by end-May with some restrictions, economic activity even in Q2 may remain subdued due to social distancing measures and the temporary shortage of labour.”