Second COVID-19 Wave Poses Downside Risk To Economy: Finance Ministry
The second wave of Covid-19 in India poses a downside risk to economic activity in the first quarter of FY22, the Finance ministry has said in its Monthly Economic Review Report for April 2021. However, the government expects a "muted economic impact" of the second wave compared to first wave.
The momentum in economic recovery since the first wave moderated in April due to the second wave in India.
"Learning to operate with Covid-19, as borne by international experience, provides a silver lining of economic resilience amidst the second waves," the Finance Ministry emphasized.
The softening food and fuel prices, normal monsoon and expected easing supply of food products, "may provide succour to a potent risk of rise in input prices surfacing as retail inflation," the Finance Ministry added.
Agriculture continues to be the silver lining, with record foodgrain production estimated in the ensuing crop year on the back of predicted normal monsoons.