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Covid Resurgence: Monthly output loss widened in mid-April
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New Delhi, May 13 (TIWN) Resurgence of Covid-19 has changed India's macroeconomic narrative from being a linear V-shaped recovery in FY22 to being a story of a lost quarter, says Emkay Global in a report.
She said the estimates imply a monthly loss of GVA growth by 90 basis points compared with loss of more than 40 basis points in output growth per month during Covid-I lockdown.
"Clearly, factors such as better adapted firms and policy response, stable financial conditions, vaccine drive, pent-up demand release and robust global growth spillovers create growth buffers," she said.
"Assuming Covid-II peaks in May'21 and restrictions ease by Q2FY22, we mark down our FY22 GDP forecast to 9.9 per cent from 11 per cent earlier."
However, she pointed out that the situation is still in a flux, but as per current dynamics the expected Q1FY22 annualised growth is seen at 16.5 per cent from more than 22 per cent estimated before the second wave.
Their estimated monthly loss of output of 0.9-1 per cent of GDP is much higher than the estimated welfare cost of universal vaccination at 0.6-0.7 per cent of GDP, thus making a successful vaccine strategy the cheapest policy path to economic normalisation.
Lately, India reported record new daily increases in coronavirus infections, prompting new lockdowns and restrictive measures to curb the spread of the pandemic.
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