Second Covid wave poses risk to India’s growth, but impact will be less severe than last year: Moody’s

The second wave of Covid infections poses a risk to India’s economic growth, but the impact will be less severe than last year, a Moody’s report said on Tuesday.

It added that a focus on “micro containment” zones to deal with the current wave of infections, as opposed to a nationwide lockdown, would mitigate the economic impact. “India’s very low coronavirus death count (only about 170,179 deaths have been recorded as of 12 April) and relatively young population also help mitigate risks,” said Moody’s.

“GDP is still likely to grow in double digits in 2021 given the low level of activity in 2020,” the ratings agency added. The western state of Maharashtra, of which the nation’s financial hub Mumbai is the capital, accounted for close to half of the caseloads till date. Other states, including the national capital Delhi, Uttar Pradesh and Karnataka have also reported a sharp increase in daily cases.

Vaccination will be the key to checking this second wave of Covid, but as of this month only about 7% of the population have been vaccinated thoughout the nation. India, which has become a vaccine distribution center for the world, has been delaying exports amid the resurgence in Covid infections. The government has also placed a temporary curb on shipments of Remdesvir, which is used for treating Covid.

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