New Delhi, Jan 17 (FN Representative) Economic activities in India faced headwinds as Omicron hit the country at the onset of the year but demand remains strong on the back of high business confidence and uptick in bank credit, Reserve Bank of India (RBI) has said in its January bulletin. “Manufacturing and several categories of services remain in expansion. More recently, expectations that Omicron may turn out to be more of a flash flood than a wave have brightened near-term prospects,” the central bank said.
The RBI noted that most countries witnessed a gradual uptick in consumer confidence after the major slump encountered when the Covid-19 pandemic first hit their shores, though it is yet to return to pre-pandemic levels in most countries. “The pandemic severely dented consumer confidence in India, with sentiments of households across strata influenced by the spread of infections and fatalities. Sentiments of consumers in severely impacted cities were more affected as compared to that for respondents in other cities,” said the bulletin. The RBI said that while consumers remain concerned about the current situation their expectations for the year ahead may portend confidence in economic recovery after subsidence of the pandemic. The RBI bulletins containing various articles are issued every month by its Department of Economic and Policy Research. The bulletin noted that Central Board of the Bank is not responsible for interpretation and opinions. Further, it said that in the case of signed articles, the responsibility is that of the author.