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    'Winter of discontent will be made glorious summer': RBI quotes Shakespeare in a forecast about India economy

    Synopsis

    "Recent shifts in the macroeconomic landscape have brightened the outlook, with GDP in striking distance of attaining positive territory and inflation easing closer to the target," RBI said.

    "If these movements sustain, policy space could open up to further support the recovery," RBI said.
    MUMBAI: Barring another wave of COVID-19 infections, the worst is over for India's economy and policymakers may soon have more room to support a recovery, the central bank said in its January bulletin released on Thursday.

    "Recent shifts in the macroeconomic landscape have brightened the outlook, with GDP in striking distance of attaining positive territory and inflation easing closer to the target," the Reserve Bank of India (RBI) said in an article on the state of the economy.

    "If these movements sustain, policy space could open up to further support the recovery," it added.

    The RBI slashed interest rates early last year to cushion the shock from the coronavirus crisis, but has left rates unchanged in recent months, cautious of rising inflation.

    "Recent high frequency indicators suggest that the recovery is getting stronger in its traction and soon the winter of our discontent will be made glorious summer"

    — RBI quoting Shakespeare


    The RBI expects Asia's third-largest economy to contract by 7.5% in the current fiscal year to March, but analysts believe it is likely to escape recession and see modest growth in the current quarter.

    Growth will be mostly consumption driven, the RBI said.

    The need to kickstart investment is growing more urgent to secure a durable turnaround and a sustainable growth trajectory, the RBI said.

    It also added that the cash sitting idly on the balance sheet of companies and banks and the funds parked with it at the reverse repo must find their way towards productive sectors and into real spending on investment activity, before it imposes a persistent deflationary weight on real activity.


    The RBI said stress on financial sector balance sheets could increase, but banks are in a better position now then they were during the 2008 global financial crisis.

    It also noted a "vigorous resumption" of government spending which acts as an important growth driver when all other components of GDP are in deep retrenchment due to the pandemic.

    "Recent high frequency indicators suggest that the recovery is getting stronger in its traction and soon the winter of our discontent will be made glorious summer," the RBI wrote, quoting William Shakespeare.


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    11 Comments on this Story

    Zillionaire 33 days ago
    Huge bubbles in stock markets. Massive debts worldwide. Devalued money from overprinting. Bubbles will BURST. RECESSION IS HERE!!! GET READY, Desis.
    Praker 33 days ago
    Now ask banks to immediately auction NpA.. also ask banks to keep 200 percentage customer collateral for each loans...
    Gopal Sriniwasan34 days ago
    Rising stock market in the midst of the gloom among the Youth who are in the Universities cut off from the needs of the industry,those out of the Universities desperately seeking jobs while the governments tells them to become entrepreneurs and wealth creators while lawlessness is spreading fast, industry sitting on a pile of cash having shed its labour force refusing to invest,Commercial PSB playing it safe in the midst of a huge NPA in its books, while the RBI in its report is delivering a poetic justice by quoting Shakespeare. What an irony?
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