Covid impacted economy, may see gradual recovery: RBI
NEW DELHI [Maha Media]: The recovery of the economy reeling from the impact of the Covid-19 pandemic will be gradual, RBI Governor Shaktikanta Das said on Wednesday.
Addressing the FICCI National Executive Committee Meeting, the central bank chief said that the country is still reeling under the impact of Covid-19 and will gradually come back on a normal growth path.
He, however, said that things have considerably improved in the second quarter after the adverse impact the pandemic had on economic activity in the first quarter.
Citing the World Bank assessment, Das said that recovery globally would take a longer route as it is not fully entrenched.
On its part, Das said, RBI has persistently done large liquidity infusion and this has ensured large borrowing by the government at a low rate and in a non-disruptive manner. The liquidity infusion in other sectors has also worked well.
Addressing a virtual conference organised by industry body Ficci, Das said that Gross Domestic Product (GDP) data released by the government was a "reflection of the ravages of the COVID-19".
Observing that the economic recovery was not yet fully entrenched, the RBI Governor said recovery is likely to be gradual.
"The recovery is, however, not yet fully entrenched and more over in some sectors the optics which was noticed in June and July, they appear to have levelled off... by all indications, the recovery is likely to be gradual as efforts towards reopening of the economy are confronted with increasing infections," he said.
As per government data, GDP during the April-June quarter contracted 23.9 per cent on account of the strict lockdown imposed by the government towards end of March to check the spread of coronavirus infections.
In his address, Das spoke about the initiatives taken by the central bank to ease the liquidity situation and make available funds to the businesses impacted by the pandemic and subsequent lockdowns.
The Governor also assured the industry that "RBI is battle ready... whatever measures are required will be taken by the RBI" to help the industry and businesses to come out of the COVID-19-induced crisis.
Further, he asked businesses to capitalise on the new opportunities created by the pandemic at the global level.