Reserve Bank of India Governor Shaktikanta Das said during the Monetary Policy Committee meet announcement that the real GDP is likely to decline by 9.5 per cent amid the coronavirus outbreak. "For the year 2021, real GDP is expected to decline by 9.5 per cent with risks tilted towards the downside," said Das during the meeting.
Governor Das said that if the current momentum of upturn gains ground, faster and stronger rebound is imminently visible.
"GDP growth may break out of contraction and turn positive by Q4," said Das adding that there is a debate raging on whether the economic revival will be V-shaped, U-shaped, L-shaped or W-shaped. He said that in his view it is likely to be a three-speed recovery with individual sectors showing varying paces depending on sector-specific realities. Das said that the sectors that showed resilience in the face of the pandemic are likely to be the ones to revive first. The Governor said agriculture, power, consumer goods, pharma and two-wheelers will see quick recovery.
During the MPC meet announcements, Das said that inflation is likely to ease closer to the target by Q4. "Consumer confidence is upbeat on the general economic situation, employment and income over the next one-year horizon," he said.
Sounding optimistic, Governor Das said that deep contractions of Q1 are behind us. He said that the focus now must shift from containment to revival.