Second Covid wave may leave Rs 2 lakh crore dent on economic output: RBI
MUMBAI: The Reserve Bank of India (RBI) has estimated that the second wave may result in a Rs 2-lakh-crore loss in output during the current fiscal, in what is the first such exercise conducted by the central bank or the government.
A loss of economic output may not have a direct corelation with the GDP, but points to some loss in the value-addition across the economy. Already, several agencies, including the RBI, have lowered growth projections for the year.
The RBI’s output loss is factored into its revised GDP forecast in the latest monetary policy estimates, where it slashed growth projections from 10.5% to 9.5%. The state of the economy report released on Wednesday said the projection was on the assumption that real GDP will grow by 18.5% in the first quarter, which is on a much lower base given the contraction last year.
Providing more details on the economic impact of the second wave, the RBI said the rate of decline in deposits has been higher, indicating that household savings have dropped in sharp contrast to the first wave. “Additionally, currency holding with the public has also decelerated significantly to 1.7% during April 2021 in comparison to the growth of 3.5% a year ago, implying heavy outgo towards Covid-induced medical expenditure.”
It said the second wave’s toll is higher due to the impact on domestic demand as several aspects of aggregate supply, such as agriculture and contactless services, are holding, while industrial production and exports have surged amid pandemic protocols. “Going forward, the speed and scale of vaccination will shape the path of recovery,” the report said.
Does Modi govt have any idea deep impact of covid ? how many daily wage labor class people pushed to starvation ?impact on soceity, various industrial sectors and business, small shops, effects on Sports ,Film Industry entertainment, Hotels, travel and tourism ? Please ask Modi to present details report in parliament.
20 Lac Crore financial stimulus was the biggest joke. Waive GST, Income Tax and get down the petrol prices to hive some relief to the people.
We have been living under a curse ever since Feku came to power in 2014. As a matter of fact, we had much lower fuel prices even when crude oil topped $147/bbl in 2008. Furthermore, our economic growth has hit 74-year low, and we now even fall behind Bangladesh in GDP per capita and the Global Hunger Index.
Indian govt, media and people are indulged in politics, religion, cast, subsidy ,reservations etc.... With so many political parties India has become place of loot and corruption. 100 of political parties are burden for this country. Due to vote bank politics laws are not formed for population control. In this scenario it is impossible to prosper for India.
why are you telling us..ask damsel Finance Minister..
I don't know about anything else, but the economy sure looks like it has regressed more than 70 years based on the increase in extreme poverty.
Just like the Death Count, this number might also be highly Inaccurate. No one Trusts any number coming out of this Failed Government anymore.
RBI looks more of a BJP news covering bulletin.
The government could nothandled the second covid wave not so adequately
Feku and his yes men should resign immediately, if they know accept their massive failure to control covid.
We Indian have the ability to strike back. One feels that this gap can be and would be bridged in the coming months.
The effect of lockdowns on economy will be massive. Job losses would be in millions. Small businesses would be winding up in millions too. The recovery will be slow and long imo. Expecing a V shaped bounce back will look possible only in dreams.
retail inflation was 6.3% in April and now may be more. Bank interest rates are less than 5%. As per inflation, bank interests should be. 1.5 % more than inflation.
Now RBI is trapped
Are you sure? Modi thinks we are already past 5 trillion. He thinks when petrol reaches 500 we’ll be doing even better. We have the worst govt to handle a crisis like this.
9 million vaccinations a day!! Impossible. If there is one area where I will say that the Modi govt mucked up, it is vaccine production.
RBI and governament (center and state) should work together to plan and execute the mission "fix the dent"
We must wear mask and vaccinate and work very very hard to keep our country running and pull it out of this and help it reach new height
Irrespective of economic condition deposits will dip if you give an interst of 5.25% in FDs for 5 years.
with the lethargic.and money minded attitude of various state governments, the cases are increasing last 3 days. We are in for 3rd wave if this continues.
More waves are coming. Be smart and Do Well