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RBI had earlier said that the country’s GDP (Gross domestic product) Will contract in fiscal year 2011, but did not give a number on it, even with analysts forecasting negative growth of up to 9.5 percent.
The RBI said in half that for the financial year, there remains uncertainty about the duration of the epidemic. Financial stability report (FSR) released on Friday.
It has been said that a complete strengthening of economic activity will be helpful for strengthening health infrastructure, improving demand conditions and correcting supply dislocations.
Additionally, the state of global factors such as business and financial conditions will also have an impact on the recovery, the central bank said.
“Near-term economic prospects are severely affected by both supply and demand factors, low consumer barriers and lockdown-induced disruptions to avoid risk,” he said.
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Despite the steps taken by financial sector regulators and the government in general to ensure financial intermediation actions, and the crises faced by disadvantaged sections of society, the risks to short-term economic prospects are high. Was classified as.
However, as borrowing costs have increased and illiteracy premieres have shrunk, demand for risk reduction and scarcity have put the entire flow of finance from both banks and non-banks into the economy, the RBI said.
It may be noted that India has been placed under lockdown since 25 March and has not yet been fully unlocked. The lockdown has restricted economic activities affecting overall GDP.
The RBI has cut rates by 1.15 percent in two moves and the government has announced a stimulus package of Rs 21 lakh crore to relieve the pain.
“The COVID-19 epidemic is unprecedented in its all-global impact and is taking a toll on life and livelihoods,” the FSR said, adding financial markets have become widely stable in response to fiscal and monetary stimulus in India.
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