According to Oxford Economics, the push by India’s states to stop lockdowns as new coronavirus infections decline, rather than waiting for vaccination rates to rise, risks sparking additional restrictions and stalling the country’s recovery.
“States are lifting lockdowns based on decreased test positivity rates rather than vaccination progress,” Priyanka Kishore, Oxford Economics’ head of India and South East Asia Economics, wrote in a client report. “This risky method increases the likelihood of future outbreaks, which would further postpone recovery.”
Provinces, including the national capital New Delhi, have begun reopening as infections appear to be leveling out, causing mobility rates to recover as of mid-June. While this is expected to stimulate some demand in the short term, there is a risk that consumption and economic activity could suffer in the future if newer limitations are imposed to prevent a recurrent viral wave.
“The vaccination scenario keeps our perspective cautious,” said Kishore, who kept India’s growth prediction for this year at 9.1 percent, lower than the 9.5 percent expected by the country’s central bank. “At this point, economic data does not warrant an upward change to our growth expectations,” she added. –Bloomberg.
(News input: The Print)