The global recovery is expected to suffer a significant loss of momentum in 2022, the Reserve Bank of India’s annual report showed.The report added that the Indian economy is relatively better placed to strengthen the recovery that is underway and improve macroeconomic prospects going forward. The report showed that the resurgence of the pandemic, a slowdown in China, and the climate stress overshooting the Paris agreement goals were the other economic worries for the world.
Otherhand, High-frequency indicators already point to some loss of momentum in the recovery that has been gaining traction from the second quarter of 2021-22. Furthermore, steadfast policy support put a floor underneath aggregate demand and economic activity. Thus, as per RBI, the experience of 2021-22 has yielded valuable lessons that will illuminate the path of the Indian economy in the year ahead.
Still, despite these risks, the recovery is getting entrenched and is broadening, said the RBI. With inflation surging worldwide, the report showed the central bank’s dilemma- tame rising price pressures without hurting economic growth. The persistence of high inflation is forcing countervailing monetary policy action at a time when supporting the economic recovery should have been assigned priority, said the RBI.