A second wave of Corona virus in India could weaken the recovery of the Indian economy, Moody’s Investors Services said in a statement. According to Moody’s, India’s economic growth is projected to slow to 12.5 per cent in FY20. According to Moody’s, the sanctions needed to prevent the transition to Corona will have an adverse effect on economic growth.
The agency further said that the sanctions announced to control the Corona would last until the end of April, which would weaken the economy. However, where the transition is high, the damage to the economy will be reduced by banning and speeding up the vaccination campaign.
More than one lakh corona cases have been reported in India every day for the past one week. Night curfew has been imposed in states including Maharashtra, Delhi, Chhattisgarh, Punjab, Haryana and Gujarat. In addition to the night curfew, measures such as reduction in working hours and partial lockdown have also been implemented. The PMI in both the manufacturing and services sectors declined in March, the first sign of an adverse effect of the infection.
The International Monetary Fund (IMF) had projected India’s economic growth rate for FY2013 at 12.5 per cent, up from 11.5 per cent. However, the IMF warned that India could not achieve this rate of economic growth if it failed to curb the Corona.
According to Google Mobility data, retail and recreation activities declined by 7% on April 7 compared to February 7. However, Moody’s clarified that creating micro-containment zones instead of nationwide lockdowns would not hurt the country’s economy as much as last year.
Moody’s further said that the death rate of corona in India is very low as compared to other countries. Corona has so far killed 1,20,16 people in India. Despite the rise in Corona cases, Moody’s expects India’s economic growth to remain in double digits in 2021.