As the severe COVID crisis and the resultant lockdowns have shut down economic activities to a great extent, Reserve Bank of India (RBI) said in its May bulletin that demand and employment have been among the most impacted economic aspects amid the second COVID wave.
The economic slowdown is not as severe as when the pandemic struck in 2020. “The biggest toll of the second wave is in terms of a demand shock – loss of mobility, discretionary spending and employment, besides inventory accumulation, while the aggregate supply is less impacted. The resurgence of COVID-19 has dented but not debilitated economic activity in the first half of Q1: 2021-22. Although extremely tentative at this stage, the central tendency of available diagnosis is that the loss of momentum is not as severe as at this time a year ago,” the RBI said.
COVID-19 second wave has had a bigger impact on aggregate demand than on aggregate supply.
The RBI Bulletin for May 2021 noted that the real economy indicators moderated through April-May 2021, IANS said.
“The biggest toll of the second wave is in terms of a demand shock – loss of mobility, discretionary spending and employment, besides inventory accumulation, while the aggregate supply is less impacted,” it said.
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