Moody’s expects that given the focus on ‘micro-containment zones’ to deal with the current wave of infections, as opposed to a nationwide lockdown, the impact on economic activity would be less severe than that seen in 2020.
The reimposition of virus management measures following a surge in Covid infections will dent economic activity and could hurt market and consumer sentiment, rating agency Moody’s said, warning of a threat to recovery. However, targeted containment measures, versus last year’s complete lockdown, and rapid vaccination will soften the hit on the economy, it said in a report released Monday.
Moody’s retained its forecast of double-digit growth in India’s gross domestic product (GDP) for FY22. In February, Moody’s had revised India’s FY22 growth outlook to 13.7% from 10.8% estimated earlier while maintaining sovereign credit rating at Baa3 (negative), the lowest investment-grade rating.
Japanese brokerage Nomura recently tempered its FY22 growth expectations for the Indian economy to 12.6% from 13.5% on account of the disruptions caused by the second Covid wave.
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