Economy

India’s second COVID-19 wave has likely peaked: Nomura report

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Covid 19

The second wave of the pandemic in India is more of a humanitarian crisis instead of an economic one and is probably going to possess peaked, a Japanese brokerage said on Thursday.   Covid 19  Covid 19  Covid 19  Covid 19  Covid 19  Covid 19  Covid 19  Covid 19

Nomura said it expects the general hit to sequential growth in April-June to be much less severe than last year when there was an entire nationwide lockdown and fewer than what the drop by mobility suggests. It estimated the economy to contract by only 3.8 percent in June quarter as compared with March quarter.

..lockdowns are more nuanced this point and consumers and businesses have adapted, it said, adding that international experience also suggests an equivalent.

Highlighting that the improving global growth will act as a tailwind, the brokerage said it expects the present lockdowns to last six more weeks. The brokerage said vaccinations are trailing at the present, but the pace of inoculation will devour after June as its analysis indicates increased supply.

We expect half the population to be fully vaccinated by end-2021 and India to succeed in its vaccine pivot point in Q3 (September quarter), which should boost domestic consumption, it added.

Maintaining its 10.8 percent GDP growth estimate for 2021-22, Nomura said the complete impact of easy financial conditions should appear because the pandemic’s uncertainty ebbs and vaccinations rise.

However, in what is often a possible area of concern, the brokerage said it expects cost pressures to accentuate from supply chain disruptions, high global commodity prices, and rising rural wages, and therefore the core inflation remaining at an elevated 5.3 percent for 2021.

We expect a reverse repo rate hike in October and maintain our involve 0.50 percent of repo rate hikes in H12022, it said

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