Omicron Could Derail Economic Activity: Cases of Covid-19 infection are on the rise. Meanwhile, a report speculates that the Reserve Bank of India may postpone normalizing monetary policy. It was claimed that Omicron might stymie economic activity.
The worldwide concern over Corona’s new variation, Omicron, is growing. Cases of Covid-19 infection are also on the rise in India. Meanwhile, a report speculates that the Reserve Bank of India may postpone normalizing monetary policy. It was claimed that Omicron might stymie economic activity.
There has been a significant increase in the number of instances of corona infection.
In addition, the central bank will present its bi-monthly monetary policy review in February. According to the research, since the number of cases of illness has increased, many states have tightened measures to avoid it. This could have a negative impact on the revival. According to Ministry of Health data, 58,097 new cases of Kovid-19 were registered in the country in a single day on Wednesday. So many everyday cases have been documented after around 199 days. There are 2135 occurrences of the novel Omicron variant in this.
This possibility was raised by economists.
According to Abhik Barua, Chief Economist at HDFC Bank, it does not appear that the RBI’s Monetary Policy Committee (MPC) will take any action to return monetary policy to normal levels at this time. This is not expected in the next monetary policy review, which will be conducted in February. He also stated that because of the rising number of Omicron cases, the GDP (Gross Domestic Product) growth rate for the March quarter could be reduced by 0.30 percent. According to Barua, the rising number of cases of infection, as well as the measures implemented to avoid it, would have an influence on growth.
The Reserve Bank of India will maintain its existing posture.
Apart from that, Tanvi Gupta Jain, Chief Economist at UBS Securities, stated that India expects the central bank to take a wait-and-see strategy in this matter for some time. He stated that if the dangers connected with the new Omicron form persist, given the uncertainties associated with it in the short term, the MPC will likely adopt a wait-and-see strategy at its February policy meeting. Aditi Nair, Chief Economist at Icra Ratings, believes the Reserve Bank will maintain its current position for some time due to the increased likelihood of sluggish growth.