Near-term prospects of economy bright with tapering of second wave, aggressive vaccination

The tapering of the second wave, coupled with an aggressive vaccination push, has brightened near-term prospects for the Indian economy, the Reserve Bank of India(RBI) Bulletin for July said on July 15.

While several high frequency indicators of activity are recovering, a solid increase in aggregate demand is yet to take shape, the Bulletin said.

A pick-up in inflation is driven largely by adverse supply shocks and sector-specific demand-supply mismatches caused by the pandemic. These factors should ease over the year as supply side measures take effect, the Bulletin said further.