“I must tell you that we are somewhat optimistic that among the various shapes of recovery….we are expecting something like a V-shaped recovery. This year being at the bottom of the V and the next year being closer to the top of the V,” Somanathan said.
The statement came amid improvements in various indicators from rising goods and services tax collections to falling unemployment, showing a gradual pick up in activity since May.
“I think we will end this year reasonably well. We will probably not do as badly as the worst expectations expect from us,” he added.
Somanathan cautioned against the demands for a bigger fiscal stimulus package. While agreeing that what has so far been announced was not sufficient to revive the economy, he said simply pumping money into the system was not a solution.
“It is not prudent to assume that you can simply pump prime your way through this crisis. In fact it’s our view that you cannot do it because even if you add more into the system, until the pandemic is behind us, we are not going to see proportionate results,” he said.
However, he did not rule out the possibility of further stimulus measures.
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