Second covid-19 wave may impede India’s economic recovery: S&P
The statement issued by S&P said, "The second wave brings in uncertainty, and a drawn-out covid-19 outbreak will impede India's recovery."
The American credit rating agency, S&P Global Ratings, has stated that the second wave of covid-19 infections poses downside risks to India’s GDP and amplifies the possibility of economic disruptions.
The statement issued by S&P said, “The second wave brings in uncertainty, and a drawn-out covid-19 outbreak will impede India’s recovery.”
It further added, “This may prompt us to revise our base-case assumption of 11 per cent growth over fiscal 2021-2022, particularly if the government is forced to reimpose broad containment measures.”
The company also said that the state-wise lockdowns could drag out the recovery of revenue and earnings of some corporate sectors.
The banks will continue to face a high level of systemic risk and the lenders’ asset quality will also be strained. The credit losses will continue to hold back the profitability during fiscal 2021-22.
The outbreak has put severe pressure on India’s health infrastructure. There is also a significant contagion threat to other countries, with the increased number of infections in India.
India has reported a record of 3,60,960 new infections on Wednesday, bringing its total to over 1.79 crore covid cases. The death toll also rose to 2,01,187, with fresh 3,293 fatalities.
The company also pointed out that the Asia-Pacific region is susceptible to a high transmission rate from covid-19 variants present in India and the low vaccination rate in the region.
Earlier this month, S&P had forecasted 11 per cent for India’s GDP this fiscal on account of fast economic reopening and fiscal stimulus.
“India’s speedy economic recovery right up until March 2021, has partly alleviated non-performing loan stresses,” the US-based agency had said.
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