Towards real recovery

Policymakers must focus on medium-term growth risks

The economy is expected to contract by 7.7 per cent in the current fiscal year, according to the first advance estimates of national income released last week. Some private sector economists expect the economy to do better than the official projection. This suggests that the economy would break out of contraction in the second half of the fiscal year. While such an outcome would be encouraging, and far better than some of the earlier estimates, the policymakers should not get carried away and ignore the medium-term growth challenges. It is worth remembering that the economy was rapidly losing momentum even