RBI stated that India suffered among the biggest pandemic-induced losses in the world in terms of output, lives, and livelihoods, which may take years to recover.
Economic activity has barely recovered to pre-COVID levels even after two years. Further, RBI said India’s economic rebound also faces difficult challenges from the legacy of deep-rooted structural bottlenecks as well as the scars of the pandemic.
The Russia-Ukraine conflict has also dampened the momentum of recovery, with its impact transmitting through record-high commodity prices, weaker global growth outlook, and tighter global financial conditions.
Also, RBI believes that concerns surrounding deglobalisation impacting future trade, capital flows and supply chains have amplified uncertainties for the business environment.