Pointing downside risks to growth across the world and also in India, Reserve Bank of India (RBI) Governor Shaktikanta Das has said the country’s economy has recovered stronger than expected from the initial impact of the COVID-19 pandemic, but there is a need to be watchful of demand sustainability after the end of festivities.
Das noted that after witnessing a sharp contraction in the economy by 23.9 per cent in Q1 and a multi-speed normalisation of activity in Q2, the Indian economy has exhibited stronger than expected pick-up in momentum of recovery. He further added that even as growth outlook has improved, downside risks to growth continue due to recent surge in infections in parts of Europe and also in parts of India.
Besides, Das said regulatory reforms have moved the financial markets to the next trajectory amid the pandemic and affirmed RBI's commitment to ensure an orderly conduct in the markets. He also said that India will continue to approach capital account convertibility ‘as a process, rather than as an event’ within a broad macroeconomic framework.