Second wave of Covid threatens to crush India’s economic recovery

India’s second wave of Covid-19 is scaring nervous consumers and threatening the country’s economic recovery, as regional authorities impose new lockdowns and curfews to slow the spread of the virus.

With India’s workload Far beyond last year’s peak of the pandemic and the rollout of a sputtering vaccine, officials are under intense pressure to take action to curb the growth of new coronavirus infections, hospitalizations and deaths. death.

But new restrictions on businesses and public activities risk undermining what was to be a robust economic rebound after one of the world’s strongest pandemic-induced contractions last year.

This month, the IMF raised its growth forecast for India for this year to 12.5%. But Gita Gopinath, the Fund’s chief economist, warned that the calculations predate the latest wave “quite worrying.”

“The next few months will be crucial, as the new wave of Covid calls into question India’s immature recovery,” Oxford Economics, a research group, said in a note, citing the biggest threats to growth.

India confirmed an all-time high of more than 152,419 new infections on Saturday and recorded 800 more deaths linked to Covid-19. Patients are already swarming hospitals in the hardest hit cities.

Facing the surge, Maharashtra, home to the country’s financial capital Mumbai, last week ordered most non-essential businesses and difficult weekend closings until at least the end of April. Several large cities, including the capital New Delhi and the Bangalore computer center, have imposed nighttime curfews.

Many Indians fear tighter restrictions looming as struggling service companies question whether they can withstand another shock.

Ritu Dalmia, a renowned restaurateur who closed three of her six restaurants last year, called the wave a “disaster.” Its lunch business has halved in four days, while a 10 p.m. curfew in New Delhi has beaten demand for dinner.

“People don’t go out anymore,” she said. “There is a huge panic. This year will be a washout. How long can we survive and how long can we survive? “

Jammu-based Sahil Mahajan, whose family interests include a car dealership and a furniture business, said walk-in customers have declined sharply in recent weeks. “Any retail business is pretty hard hit,” he said.

India’s economic indicators improved dramatically in January and February, when daily new cases fell to around 10,000 a day. But growing stress is taking its toll, with a business activity index tracked by Nomura recording its biggest drop in 12 months in the first week of April.

Economists don’t expect a general national lockdown like last year, which they say should ease the pain in the long run. Radhika Rao of DBS Bank said limiting restrictions to sectors such as hospitality, rather than industrial activity or construction, would help limit the fallout.

Many had hoped that India’s ambitious vaccination campaign to curb new cases would create an environment for robust economic activity. But the rollout has been surprisingly slow.

Indian Serum Institute, India’s leading supplier of vaccines for national deployment, has the capacity to produce approximately 2.4 million doses per day. This will limit the pace of inoculation in a country of 1.4 billion people unless New Delhi approves the use of other injections.

Many migrant workers, traumatized after being stranded in cities by last year’s lockdown, have started to leave cities like Mumbai and Delhi again.

Gurfan Sheikh, who runs a small leatherworking workshop for a collective race in a large Mumbai slum, said his two employees, both migrants from across the country, had fled the city.

“Ten days ago, I was fine, I was earning enough to feed my family. But since the lockdown was announced, we have had to close our stores, ”he said. “How are they [employees] allow me to live if I can’t afford them?

Additional reporting by Andrea Rodrigues

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *