Poor Economic Growth prediction of RBI has disappointed the Indian in this pandemic. Now people has to be ready for its impact for a very long term. As per latest data from the Reserve Bank of India (RBI) the economy growth in India is all time low till May 2021. This trend has reported many parts of the world due to corona pandemic.
The situation become more tense because Indian economical was already in poor state much before the corona pandemic hit the nation last years. Although government offered some relief package last year to industries and common man. Which has helped economy to grow little bit in October to December last year. This year no relief offered by government or RBI to help the people of industry so far.
Current Situation Index and Futures Expectations Index hit all time low in May 2021
As per RBI, Consumer Confidence Survey and Current Situation Index fell to a record low in May. Let me tell you that, this survey organised by RBI every year to understand the consumers confidence in economy. If this index gor above 100 that means the common people are feeling better about themselves. The survey also represent that people has full confidence in current economic condition of the country. This time it has fell down to less than 50% means Poor Economic Growth will trouble Indians for sure.
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It is not only Current Situation Index but Futures Expectations Index is also reported at all timely low this time. The participants in the RBI survey have expressed their fears that India Poor Economic Growth will hit the country in all aspects.As per survey, people believe that countries economic condition will be weak for entire year. The Reserve Bank said that its futures expectation index also declined from 108.8 to to 96.4 in May 2021. This survey also revealed the reduction in the expenditure of the households.
Disappointment among people about their employment and living condition: Poor Economic Growth
The Reserve Bank survey also said that people are more concerned about their employment and living condition. Poor Economic Growth of India in last few year has already caused huge job loss. Now the Employment index has drooped further and million lost their job in last one year due to corona. This job loss has reported in both formal and informal sector. Recently CMIE published a data and claimed that 10 million people lost their job in second wave of corona in last two months.
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RBI survey also released peoples fear in drop of their income and job loss. This will lead to poor living condition and drop the demand in almost all sectors. When large number of people loose their job and face drop in monthly income than they will not buy nonessential items. They will only spend money for essential items required for living. It will not be a good sign and Poor Economic Growth will impact all sector for sure.
High frequency indicator indicating reduction in all types of activities: Poor Economic Growth
This is bad news for a country’s economy when primary consumption of goods and services reduced. The High Frequency Economic Indicator indicating a moderation in all activities. This data issued more or less on a monthly to understand the demand of people. It is expected that all business activities will be slow down for full year due to Poor Economic Growth in India.
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The impact is already visible in market and demand for electricity has decreased in industrial consumption. Unemployment rate is rising in all sector from a very long time. There is a very less possibility for new job creation in market. Almost all sectors freez the new hiring and focusing on job cuts and pay revision for existing employees.
RBI is unable to cut rates and experts anticipating high inflation upto 10.2%: Poor Economic Growth
According to the Reserve Bank Survey, most people are anticipating inflation to remain high for a long time. This is adding to the troubles on the monetary policy as well which had stalled interest rate cuts for more than a year due to rising inflation. Moreover RBI will not be able to cut interest rate even in future to boost economy and growth. This is only possible when government take initiative and announce relief to the people and industry. They may help to improve in Poor Economic Growth in long run.
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The experts are also expecting that inflation rate to be 10.2% in May. This is 150 basis points higher than their estimate in March. They are forecasting inflation to remain at 10.8% for the next three months from May. This is 70 basis points higher than the inflation forecast reported in March. It is estimates that the inflation rate can be 10.9% in the next one year. This will further kill the pole of people expecting job, or good living standard this year.
