India’s Macroeconomy More Healthy: MPC Member Ashima Goyal

By Aditya Raghunath

Investing.com — Eminent economist and Monetary Policy Committee member Ashima Goyal, in an interview to news agency PTI, said that India’s macroeconomy is more healthy despite the pandemic, and that it will recover quickly.

India recovered relatively quickly after the first and second waves of the pandemic, and that there are already signs of a rise in private investment in sectors where capacity constraints are present.

“Despite the Covid-19 severe shock, India’s macroeconomy is more healthy and ready for faster growth than it has been for a long time. That recovery from both the first and second waves was faster than expected points towards inherent strengths of the economy,” said Goyal.

A government release on August 29 said that India attracted foreign direct investment (FDI) inflows of $22.53 billion during the April-June 2021 quarter. This was 190% higher than the April-June 2020 quarter.

“Portfolio inflows into India are not only due to the quantitative easing of rich countries’ central banks, they are also attracted by India’s growth prospects. All emerging markets do not get such inflows,” said Goyal.

She added, “gradual rise in policy interest rates need not lead to a major correction if the rise accompanies a growth recovery, which is positive for markets and long term growth prospects remain good.”