Prospects brightening for economy as 2nd COVID wave wanes: RBI bulletin

Mumbai: Prospects are brightening for the Indian economy achieving “escape velocity” from the pandemic as the second wave of COVID-19 wanes and preparedness for future remains on war-alert status, according to an RBI bulletin published on Thursday.
An article on the state of the economy, published in the September bulletin, said aggregate demand is gaining firmer ground, while on the supply side, IIP and core industries mirror improvement in industrial activity and services sector indicators point towards sustained recovery.
“In August, we believe that India passed a turning point which consolidates and thrives come September,” said the article authored by a team lead by RBI Deputy Governor Michael Debabrata Patra.
It further said the trajectory of inflation is shifting down more favourably than anticipated.
“As pandemic scars heal and supply conditions are restored with productivity gains, a sustained easing of core inflation can be expected, which will reinforce the growth-supportive stance of monetary policy,” it said.
The central bank, however, 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).
The article further said domestic economic conditions rounded a turning point in August as growth impulses gathered momentum with the progressive opening up of the economy and scaling up of the vaccination drive.
“Prospects are brightening for the economy achieving escape velocity from the pandemic as the second wave wanes and preparedness for future remains on war-alert status,” it said.
On aggregate demand, it said e-way bills remained above pre-pandemic levels of February 2020, signalling higher GST collections going forward.

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