Covid Second Wave Has Hit Domestic Demand, Says RBI Report

RBI has said that while the second wave has hit domestic demand, agriculture and contactless services have held up.

The Reserve Bank of India (RBI) has observed that the Indian economy continues to wrestle with the second wave of Coronavirus pandemic even though cautious optimism is returning. It has assessed that the second wave has basically hit domestic demand hard. In its monthly bulletin for June 2021, the central bank has focussed on the overall state of the economy, India's sovereign yield curve and the fiscal framework of the country, in the form of three articles. Commenting on the state of the economy, the central bank has said that while the second wave has hit domestic demand, on the brighter side, several aspects of aggregate supply conditions - agriculture and contactless services are holding up, while industrial production and exports have surged compared to last year amidst pandemic protocols. "Going forward, the speed and scale of vaccination will shape the path of recovery. The economy has the resilience and the fundamentals to bounce back from the pandemic and unshackle itself from pre-existing cyclical and structural hindrances," it said.