Axis Bank’s chief executive and managing director Amitabh Chaudhry feels the economic recovery will be slow, but there is optimism coming in from improved loan demand and credit card spends for the third largest private sector lender.
He, however, sounded sceptical on whether the government can come out with more stimulus measures, and said that the economic recovery will be a slow “L-shaped” one.
It can be noted that the country’s GDP contracted by nearly a fourth in the June quarter and everybody is watching for signs of revival. Some analysts feel the encouraging data for the last month can be a sign of pent-up demand.
“My assessment is that the macro situation has improved quite a bit, especially in the last month or so. I’m seeing a clear return of optimism and this is evident when I converse with CEOs of various organisations and when I see our own new loan enquiries, credit card spends and account openings,” Chaudhry told media.
He was quick to add that we are not completely out of the woods yet and a sustained recovery may take a few quarters.
Over the recovery trajectory, Chaudhry said it will be “L-shaped” recovery which is characterised by a slow rate of recovery with persistent unemployment and stagnant economic growth, as per many economists.
“It will be more like a L-shaped recovery where the pick-up will be slow and gradual. It will take a lot of time. Somewhere the confidence of the customer has been shaken, it will take time to come back,” he said.
The spread of the COVID-19 infections in rural areas means that the hopes of revival in the hinterland will be “subdued” and this is a matter of concern, he said.
The government should desist from localised lockdowns for the short term, he said, adding that such measures hurt the ability to plan.
When asked if he expects the government to come out with a second stimulus package ahead of the festivities, Chaudhry sounded a bit sceptical and advocated everybody to be “realist”.
“The government has said that they might infuse more into the economy. I am quite doubtful that we should expect significant coming through for the festive season,” he said.
“Somewhere you’ve to be a realist and frankly just do what we have to do and get the business back rather than waiting for further handouts from the government,” he said.