According to RBI, India will likely take another 13 years to overcome losses due to the COVID-19 lockdown. The central bank announced this after the rising COVID-19 infections in major cities of China. Overall inflation in commodity prices, supply chain constraints, a longer time for shipping costs and the recent hike in interest rates by the RBI and the Fed Reserve is affecting the Indian economic growth.
The wait for India to become a $5 trillion economic powerhouse by 2024-25 will take longer than the Finance Ministry had initially intended. Heatwaves this summer have further worsened the manufacturing activity. It’s said that this is the worst summer in the last 122 years.
Should This Concern Us?
The long list of global pressures will affect economic growth. This year would remain troublesome for the economy and the stock market. Until all the economic and monetary issues are resolved, especially the Russia-Ukraine war, it is advisable to stay cautious.
What Lies Ahead?
The RBI said price stability is necessary for sustainable and robust growth. To secure India’s medium-term growth prospects, general government debt will be reduced to 66% of GDP over the next five years.