The Moody’s Investors Service stated that there is a high risk for a resurgence of COVID-19 infection in India, partial lockdown and a strong economic rebound with a slow pace of vaccination, although the country may still record double-digit growth.
In a note on India’s sovereign rating, the global agency said that the second wave of infections presented a growth forecast of 13.7% of its 2021-22 GDP, ‘because the reintegration of virus management measures will curb economic activity’ And the market and the consumer may suffer. feeling ‘.
‘Retail activity drops’
“Retail and entertainment activity across India was reduced by 25% by 7 April compared to 24 February,” said Moody’s. “This was shown in the March Consumer Confidence Survey of the Reserve Bank of India, which showed a decline in the perception of the economic situation and expectations of a reduction in spending on non-essential items,” it said.
India recorded its highest daily increase in new COVID-19 infections since the epidemic began on April 11, pushing its active case beyond the previous 1 million, the agency said, adding that vaccination roll-out would be important in management. In a way that balances ‘virus management against maintaining economic activity’.
Despite the fresh risks, the rating agency said that India’s GDP is still likely to grow in double digits in 2021, given its low level of activity in 2020. “Attention has been paid to ‘micro-control areas’ to deal with the current wave of infection.”, As opposed to a nationwide lockdown, we expect the impact on economic activity to be less severe than in 2020.
“India’s very low coronavirus death count (about 1,70,179 deaths have been recorded as of April 12) and a relatively small population also help reduce the risk,” it said.
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