The economy of India is now on a recovery course since the easing of the stringent COVID-19 restrictions from June 2020.
The Moody’s Analytics Asia Pacific Economic Preview said India’s December quarter recorded a stronger than expected 0.4 percent yearly rebound, aided by improving demand and declining domestic cases.
It said the strong resurgence of COVID-19 in recent weeks, however, has renewed the uncertainty over near-term prospects, with important states recording sharp spikes in daily new cases.
Moody’s Analytics said inflation pressures driven by food and fuel prices also remain pertinent.
Under these circumstances, the Reserve Bank of India (RBI) is expected to maintain the status quo but retain space for further easing when a rate cut can gain more traction in stimulating demand.
With this, the RBI is expected to keep its benchmark repo rate unchanged at 4 percent in its April announcement.