Elevated temperatures in northern regions and plausibility of severe upcoming heat waves to affect agricultural output and keep inflation at elevated levels, says a report.
Rising inflation and firming bond yields in the U.S. push down Indian benchmark indices, causing a correction of around 6% from the latest life–highs of February 16.
According to the RBI, the gross NPA ratio of all scheduled commercial banks may increase from 7.5% in September 2020 to 13.5% by September 2021, and even escalate to 14.8% in severe stress scenario.
As per National Statistical Office data, India's GDP may contract by 7.7% this fiscal year, worst since 1951-1952. The World Bank paints an even bleaker picture. But hope for recovery still abounds.
While directly mum on inflation and growth, the RBI’s latest monetary policy report warns that Covid-19 would impact economic activity in India through lockdowns and slowing global trade and growth.
At the last monetary policy meeting of FY20, the central bank kept the interest rate unchanged, with a warning to not read the ‘pause’ continually for its future actions.
Advance estimates from the National Statistical Office (NSO) peg India’s GDP to grow at 5% in FY20 as compared to FY19’s 6.8%; manufacturing is projected to grow just 2%.
