January 6, 2022
2 mins read

Omicron to hit GDP

The rising cases have led to various curbs instituted by state governments such as reduced capacity of markets, night and weekend curfews to check human mobility….reports Asian Lite News

 Rising cases of the Omicron variant of Covid-19 and the subsequent curbs will have an adverse impact on India’s Q4FY22 GDP, said India Ratings and Research (Ind-Ra).

The rising cases have led to various curbs instituted by state governments such as reduced capacity of markets, night and weekend curfews to check human mobility. As per Ind-Ra’s estimates, GDP growth in Q4FY22 will now come in at 5.7 per cent year-on-year (YoY) which is 40 basis points lower than the agency’s earlier estimate of 6.1 per cent.

“For the entire FY22, the GDP is expected to clock a growth rate of 9.3 per cent YoY, 10 bp lower than our earlier estimate of 9.4 per cent,” the agency said.

Although Omicron cases are spreading much faster than the earlier Covid variants, indications, so far, suggest that the infections are milder and mostly not life threatening.

Resultantly, the curbs imposed by state governments will be less disruptive than Covid 1.0 and 2.0. Also, the earlier two waves have made both government and businesses more equipped to deal and be more resilient in such situations.

Consequently, Ind-Ra said: “the impact of Covid 3.0 on the economy will be lower than Covid 1.0 and 2.0. Once the Covid 3.0 subsides, the economy is expected to bounce back pretty quickly. However, this would not have been possible without the policy support.”

According to the agency, policy support – both monetary and fiscal – would be critical till the threat of pandemic continues and the economy reaches the stage of a sustained growth trajectory.

“Despite the ongoing recovery, select high frequency indicators such as ‘Index of Industrial Production’ are showing that the industrial output levels are still lower than pre-Covid-19 levels. Against this backdrop, Ind-Ra believes the Reserve Bank of India will continue to pursue its accommodative policy stance with no change in the policy rate in the foreseeable future and the union government would not be in a hurry to get back to the fiscal consolidation path. It will be a gradual process keeping the unfolding economic scenario in mind,” it said.

ALSO READ: £460 million logistics contract to sustain more than 600 jobs

Previous Story

No immediate deportation for Djokovic

Next Story

Social commerce market to hit $1.2 trillion by 2025

Latest from Economy

Mali embraces solar power for rural areas  

The border village of Karan and its 3,000 people used to go days without electricity. Now, enough power is available around the clock to run small video gaming centers and boost commercial

Trump administration to formally end USAID 

The move will fully absorb all remaining USAID functions into the State Department effective July 1, and according to a reduction in force notice to remaining staff, will “obviate” the need for

IMF Backs Pakistan with $1.3B Aid

The new deal comes with an agreement on the first review of the ongoing $7 billion bailout programme…reports Asian Lite News The International Monetary Fund (IMF) has finalized a staff-level agreement with

Pay Hike for Ministers, Struggles for Citizens

Sharif has been calling on Pakistanis to tighten their expenditures due to excessive taxes, asserting that it is a recovery phase for the country….writes Hamza Ameer The Shehbaz Sharif-led Pakistani government, which
Go toTop

Don't Miss

Congress slams household expenditure survey

Congress president Mallikarjun Kharge demanded that a census be conducted

JD(S) condemns “racial slurs” against Kumaraswamy 

The party criticised the “racial slurs” by the Minister and