India is one of the emerging markets which is beating the growth trajectory. Corporate earnings, better-than-expected manufacturing activity, resilient demand, healthy exports and accelerated pace of vaccination is helping the economy.
The Indian economy remains unaffected by the devastating second COVID-19 wave. Many economists have upgraded the growth rate for India. Looking at the current recovery, the stock market has also responded positively. Retail participation is at the highest level as compared to the previous years.
Whispers From the Experts
According to a Bloomberg survey, India's annual growth outlook for the economy is stable at 9.2%, given the mild after-effects of COVID-19 on the services sector and manufacturing activity. A robust healthcare system has also given the economy a little push.
Mirroring the same view, Rahul Bajoria, Chief India Economist at Barclays Bank PLC, feels that a rapid recovery is underway because the economy is steadily improving again. On the contrary, Former RBI Governor Raghuram Rajan believes that India is just witnessing a pent-up demand. Rajan highlighted that the smaller businesses will continue to face stress as their demand is limited.
Reason Behind the Bulging Economy
Resilient demand and a steadily functioned manufacturing sector have boosted India's growth story. Looking at the steady trend, many economists have upgraded the growth rate to double-digits. Factories have witnessed a surge of activity since July, given the pick up in new orders.
Additionally, exports have also increased in the last eight months highlighting the growth and resilient global demand. Meanwhile, the Reserve Bank of India’s continuous efforts to keep the interest rates on a comfortable level despite economic revival is also one of the key factors behind the resilient demand.
Post the second COVID-19 wave, the economy steadily opened for the manufacturing sector, which continued the operations resulting in healthy exports. The milder hit to the economy coincided with the rising vaccination over the past few weeks. In fact, Indian scientists have also said that the Indian population will only get affected if there’s a new COVID virus mutant infecting people. Meanwhile, RBI’s constant efforts to keep the interest rates on the lower side has further helped the economic scenario.
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