Left Menu
Development News Edition

Das expects economy to revive soon, feels slowdown cyclical,

PTI | Mumbai | Updated: 07-08-2019 13:23 IST | Created: 07-08-2019 13:23 IST
Das expects economy to revive soon, feels slowdown cyclical,

Reserve Bank governor Shaktikanta Das Wednesday said the economy is in the midst of a cyclical slowdown and not a structural one, and exuded confidence of growth reviving soon on the back of cheaper money and likely more government measures. He expressed confidence that the government will come up with more measures to revive the sagging growth, which dipped to a five-year low of 5.8 percent for the March quarter and is widely expected to slip further in the June quarter.

At the same time, the MPC lowered its growth forecast to 6.9 percent now from 7 percent it had projected in the June policy but Das made it clear that downward revision is not with a downward risks. Das said according to the RBI's understanding, "the growth slowdown is not structural but cyclical," and expects growth to revive in the second half.

Speaking to reporters after the six-member MPC cut the key rates by a steeper 0.35 bps to 5.4 percent in their fourth consecutive action since February, Das expressed satisfaction on transmission and hoped credit growth will also pick up soon helping rev up the growth engine. Das said with the deeper rate cut this time around, the central bank expects more lending rate cuts by the banks in the coming weeks and noted that the money markets have fully absorbed the rate actions since February.

"The impact of monetary policy easing is expected to help economic activity going forward," he said. Das also dismissed notions of carterlisation by banks on holding onto high lending rates, pointing out that the largest lender SBI has taken the lead last month and others will follow soon.

He said government and RBI are taking all possible measures in tandem to help push up the growth process. But he was soon to assert that the MPC decision is independent. It can be noted that a slew of industry leaders, including engineering giant L&T chairman AM Naik and Godrej Group chairman Adi Godrej have of late expressed disappointment on the economy and called for more measures to revive growth with faster decision making and ensuring communal harmony.

Das said the central bank will ensure that there is adequate liquidity in the system to help growth and also ruled out a cut in the cash reserve ratio (CRR) at the moment. Meanwhile, Das declined to voice RBI's views on the government idea of sovereign borrowing from abroad, saying it conveys its views internally at the highest level.

On the crippled NBFC sector, he said the RBI endeavour is to ensure that none of the systematically important NBFCs fall by the wayside..


TRENDING

OPINION / BLOG / INTERVIEW

Post-COVID-19 Nigeria needs a robust Health Management Information System to handle high disease burden

Nigeria is among a few countries that conceptualised a health management information system HMIS in the early 90s but implementation has been a challenge till date. Besides COVID-19, the country has a huge burden of communicable and non-com...

Morocco COVID-19 response: A fragile health system and the deteriorating situation

Learning from its European neighbors, Morocco imposed drastic measures from the initial stages of the COVID-19 outbreak to try to contain its spread. The strategy worked for a few months but the cases have surged after mid-June. In this sit...

COVID-19: Argentina’s health system inefficiencies exaggerate flaws of health information system

You can recover from a drop in the GDP, but you cant recover from death, was the straightforward mindset of Argentinas President Alberto Fernndez and defined the countrys response to COVID-19. The South American nation imposed a strict...

Rwanda’s COVID-19 response commendable but health information system needs improvement

Rwanda is consistently working to improve its health information system from many years. However, it is primarily dependent on the collection and reporting of health data on a monthly basis. Besides, evaluation studies on Rwandas HIS publis...

Videos

Latest News

Tennis-Nadal not interested in excuses after Rome exit

Rafa Nadal refused to make excuses for his shock defeat by Diego Schwartzman in the quarter-finals of the Italian Open, insisting that his focus is now on fine-tuning his game ahead of the French Open which begins Sept. 27. The nine-time Ro...

Tigers rally in 8th to top Indians after Gardenhire news

The Detroit Tigers scored four eighth-inning runs following the retirement of their manager prior to the game and downed the visiting Cleveland Indians 5-2 on Saturday. Ron Gardenhire cited health reasons for his sudden departure. He was re...

U.N. chief says no action on U.N. Iran sanctions due to 'uncertainty'

United Nations Secretary-General Antonio Guterres told the Security Council on Saturday he cannot take any action on a U.S. declaration that all U.N. sanctions on Iran had been reimposed because there would appear to be uncertainty on the i...

Fewer cases in Melbourne; Japan travel up

Australias second-largest city, Melbourne, has moved close to easing severe lockdown restrictions after recording only 14 new COVID-19 cases on Sunday. It was the second day in a row new infections fell below 30, after 21 were reported on S...

Give Feedback