Billionaire banker Udai Kotak cited the tough rides of the Indian economy in the growing case of Covid-19. India is currently working on a surge in the third wave of the COVID-19 pandemic caused by a new Omicron variant. As the number of incidents increased and had a major impact on economic activity, new restrictions on mobility were imposed nationwide.
Uday Kotak, CEO of Kotak Mahindra Bank, predicted in a tweet that the question could be chilling. He talked about the unexpected consequences of COVID-19 and their economic implications.
“The unexpected result of Covid is a sustained supply shortage. As inflation moves from temporary to structural, central banks around the world can catch up. Inflation also affects governments. Omicron may delay that, but is the low interest rate “Goldilock” over? Kotak tweeted.
The unexpected result of Covid is a persistent supply shortage. Central banks around the world can catch up as inflation moves from temporary to structural. Inflation also affects the government. Omicron may delay that, but is the low interest rate “Goldilock” over? — Uday Kotak (@udaykotak) January 15, 2022
Kotak points out the surge in inflation and supply chain disruptions throughout the economy. This ends the “Goldilocks” phase of the Indian economy.
“Goldilocks” is a word derived from the children’s story “Goldilocks and the Three Bears”. In financial terms, “goldy lock” is used to describe an ideal economy, including high growth rates and low interest rates.
To maintain this ideal “gold rock” economic condition, governments need to inject funds into various infrastructure projects and devise favorable tax policies. However, this may only work if the central bank updates monetary policy to keep up with the rising momentum of the economy.
Earlier this month, Kotak advised the government not to rely on printing more money as an escape route when the economy was suffering from the outbreak of Omicron. “60% of the world’s reserves are in the US dollar. An exceptional privilege that allows the United States to become liberal by printing money, fiscal and current account deficits, and military spending. Like: “As I say, not as I say.” In other countries, don’t walk in US shoes! He wrote
60% of the world’s reserves are US dollars. An exceptional privilege that allows the United States to become liberal by printing money, budget and current account deficits, and military spending. As the quote goes: “As I say, not as I say.” In other countries, do not walk in US shoes. pic.twitter.com/j9vyI8zeDG— Uday Kotak (@udaykotak) January 3, 2022
With the COVID-19 pandemic, the Indian economy is entering a period of turmoil, and the current lead wave of Omicron is exacerbating the situation.
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Kotak Mahindra CEO Uday Kotak warns of India’s economic tensions in Covid-19
Source link Kotak Mahindra CEO Uday Kotak warns of India’s economic tensions in Covid-19