India’s recovery from the slowdown inflicted by the coronavirus pandemic is projected to be higher than other member nations, according to the BRICS Economic Bulletin 2021 released by the Reserve Bank of India (RBI) on December 10.
"Charting the expected growth recovery for 2021, India’s recovery is projected to be higher than other BRICS nations," the bulletin said.
Among the BRICS nations, Brazil’s response has been the largest of the most emerging market economies (EMEs), including the other BRICS countries, the bulletin said citing the IMF’s data on countries fiscal measures in response to the COVID-19 pandemic.
Both South Africa and India also implemented sizeable expansionary fiscal responses, the bulletin said.
The second wave of infection in India since March 2021 has led to regional lockdowns, stringent restrictions, and halting of activity in many sectors which could affect the pace of its recovery.
"Similarly, Russia and South Africa have entered into the third wave of infection, posing threats to their economic recovery. China has also suffered a recent flare-up of COVID-19, since the initial outbreak, leading to restrictions on activity. However, the local transmissions appear to be in a waning mode," the Bulletin said.
The BRICS Economic Bulletin 2021 is prepared by the BRICS Contingent Reserve Arrangement (CRA) Research Group with members from BRICS central banks. The CRA Research Group was set up to enhance the research, economic analysis, and surveillance capacity of the BRICS.
The BRICS Economic Bulletin 2021 addresses the theme of ‘Navigating the Ongoing Pandemic: The BRICS Experience of Resilience and Recovery’, covering the economic recovery and its divergences, inflation risks, external sector performances, financial sector vulnerabilities, and other macroeconomic risks.
Indian response
To counter the impact of Covid in the Indian economy, the Reserve Bank of India (RBI) had announced a series of expansionary policy measures including providing special liquidity windows and offering loan restructuring facilities to stressed borrowers.
Indian economy is slowly recovering from the two successive waves of Covid 19. The RBI has projected real GDP growth at 9.5 percent for the fiscal year 2022. Along with growth worries, inflation management too has emerged as a major worry for the Indian central bank.
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Inflation shot up in India during June-November 2020 and moved beyond 6 percent, which is the upper limit of the inflation target, due to supply disruptions and inflation emanating from food items, the Bulletin noted.