Mumbai: India’s economic recovery has fulfilled the wind cover from a rapid increase in Covid-19 infection because of the omicron variant but the condition of the aggregate demand remains strong, the Indian Reserve Bank (RBI) said in a monthly bulletin on Monday.
“Road recovery in India as in the remaining global economy encountered a wind closed from a rapid surge in infection because Omicron,” RBI wrote.
However, due to optimistic consumer and business confidence and uptick in bank loans, the condition of the demand remains strong while in the fronts of sowing winter plants has exceeded last year’s level and normal area.
“Manufacturing and several fixed service categories in expansion.
Recently, the hope that Omicron can be more than a flash flood than a wave that has enlightened short-term prospects,” RBI said.
Covid-19 India infection rose 258,089 in the last 24 hours, the day after reaching an eight-month peak, the Ministry of Health said on Monday, took the calculation to 37.38 million.
The central bank said the revival of Covid-19 and the emergence of new variants pose a major risk of the short-term global economic prospects.
It is said that inflation continues to increase cross geography in the midst of disruption in production, supply chains and transportation.
“As a result, divergence between the attitude of monetary policy throughout the jurisdiction has widened,” RBI added.
“There are indications that supply chain disorders and shipping costs slowly subside, although reduced inflation may take longer.
It provides a window of opportunity to focus all energy on accelerating and expanding global recovery”.
Retail inflation in India, supported by the increase in food prices and manufacturing goods, rose 5.59% in December from the previous year and compared with 4.91% the previous month, data last week showed.
RBI said food inflation and volatility remain a challenge and will require supply side interventions such as higher public investment, storage infrastructure and food processing promotion.