While the global economic scenario appears uncertain, on the domestic front, economic recovery has gained strength though the pace of improvement is uneven.
This is the Reserve Bank of India’s (RBI) analysis of the current state of the economy, on which it has elaborated in its monthly bulletin for November 2021.
In the chapter on the state of economy, the central bank noted in the bulletin that “indicators of aggregate demand posit a brighter near-term outlook than before. On the supply side, the Rabi season has set in early on a positive note on the back of a record Kharif harvest and manufacturing is showing improvement in overall operating conditions, while services are in strong expansion mode”.
In totality, the monetary and credit conditions stay conducive for a durable economic recovery to take root, it further said.
At the same time, it highlighted how the pandemic had led to a massive disruption in global as well as domestic economy causing uncertainty as reflected in large swings in forecasts of growth and inflation for the fiscal gone by, i.e. 2020-21.
The pandemic-induced lockdowns led to significant downward revision in the growth forecast for 2020-21 and the subsequent opening up of the economy led to an improved growth outlook.