The rise in consumer spending, the success of the inoculation activities and the upsurge in Government investment have collectively led to the reinforcement of the Indian economy in the July-September quarter of this financial year. Additionally, a Reuter’s survey of 44 economists projected that the GDP data will show 8.4% YOY growth, as compared to a 7.5% contraction in the same period last year.
However, as the threat of a new coronavirus variant – Omicron – looms over the world, it may turn out to be a bad omen for the Indian economy when fused with rising manufacturing prices and slowing global growth.
COVID risks have resurfaced globally and (these need to be watched) for implications for the timing of monetary policy normalization.”~ Shubhada Rao, Economist at Mumbai-based QuantEco Research
Private economists appreciated the resilient farm sector and other fast-moving indicators of economic growth include exports, rail freight, electricity generation and bank deposits. The Reserve Bank of India (RBI), which has cut key interest rates to infuse massive liquidity to shore up the economy, is widely expected to suck out liquidity before normalising rates amid growing inflationary concerns.
Amid the rising threat of the new COVID variant, testing at airports has been tightened and the Government is reviewing its recent decision to resume international passenger flights, especially to high-risk countries.