The country’s economy, which has shown resilience to emerge from a recession caused by the COVID-19 pandemic, is expected to rebound from the next fiscal year, State Bank of India President Dinesh Kumar Khara said on Saturday.
There will be a “paradigm shift” that will lead to a more mature economy “with economic actors learning to contain costs, he said.
Addressing the virtual annual general meeting of the Bengal Chamber of Commerce and Industry, Khara said: “The economy is expected to rebound from the next fiscal year starting in April 2021. The next normalcy will see a paradigm shift and some of them will be permanent. “
Khara said the economy had shown “resilience to come out of recession” and some positive traction was seen towards the end of the first quarter of the current fiscal year.
According to him, the investment demand from companies will take some time to recover.
“Average capacity utilization among corporations is around 69 percent. Investment demand from corporations will take some time to recover. Cash-rich USPs will initially embark on a capex plan that will generate demand for investment, “he said.
The corporate sector will become “very careful with loans” and will initially use its internal resources.
He said core sectors of the economy, such as steel and cement, have performed well throughout the period starting in April 2020, and are in a position to take advantage of export markets.
However, travel, tourism and hospitality are the sectors most affected after the coronavirus outbreak.
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