India’s economic outlook weakens as COVID variant rages on

NEW DELHI – The wave of variant-induced coronavirus cases sweeping through India is casting a cloud over the country’s prospects for recovery after a year of record economic contraction.

The country of more than 1.3 billion people is now approaching 300,000 new cases of coronavirus per day – triple the worst daily figures during the peak of the first wave in September – and local authorities are scrambling to halt the spread.

The government in the capital region of Delhi, where authorities are grappling with shortages of oxygen and hospital beds, imposed a lockdown from Monday to April 26. place in Maharashtra, where Mumbai is located. These measures could be extended if the surge continues.

The outbreak has prompted private sector analysts to cut their growth forecasts for fiscal 2021.

UBS reduced its estimate from 11.5% to 10%, while the Indian rating agency ICRA lowered the high of its projection to 10.5% from 11%. Nomura Singapore has lowered its forecast from 13% to 12.6%. The government estimates that gross domestic product fell 8% in fiscal 2020, the biggest drop on record.

Unlike many developed countries, urban lockdowns and restrictions on economic activity hit the poor particularly hard. The epidemic could dampen consumer spending, which accounts for more than half of India’s gross domestic product.

The first wave of nationwide lockdowns in March 2020 left up to 120 million migrant workers in major cities like New Delhi jobless. India’s GDP fell 24.4% in the second quarter of 2020, the worst result among major economies.

The new lockdowns are causing an exodus of migrant workers from cities to their hometowns, according to Indian media, which risks further dampening economic activity.

The epidemic has also disrupted diplomatic plans. British Prime Minister Boris Johnson has canceled a planned visit to India this month, as has Japanese Prime Minister Yoshihide Suga. The Indian government has canceled Prime Minister Narendra Modi’s trip to the European Union, scheduled for early next month.

In a meeting with doctors on Monday, Modi called vaccines “the biggest weapon” against the epidemic. The government decided that day to extend COVID-19 vaccination to all people aged 18 and over on May 1.

India is the world’s largest vaccine maker, but is starting to see a shortage of home-use vaccines as the epidemic rages on. The government plans to encourage pharmaceutical companies to ramp up production, but if the virus continues to spread, the dose supply to neighboring countries could be affected.

About William W.

Check Also

Can Chancellor Rishi Sunak hang on as the best dog for the top job as he faces a big test on the budget from the tax hike?

THERE is an old saying in politics: if you want a friend, get a dog. …