S&P: India’s second covid wave poses downside risks to GDP, may impede recovery

India’s economic recovery is threatened by the second wave of COVID-19 infections, which poses a downside risk to the GDP and exposes other nations to further waves of outbreaks.

Key takeaways

"In addition to the substantial loss of life and significant humanitarian concerns, S&P Global Ratings believes the outbreak poses downside risks to GDP and heightens the possibility of business disruptions,"

May have to revise its base-case assumption of 11 percent growth over fiscal 2021/2022, especially if wider containment measures are re-imposed.

Expect the consumer retail and airport sectors to have a dragged-out recovery with localized lockdowns and curfews in several parts of the country, and said the Indian banking sector continued to face a "high level of systemic risk".

“The Asia-Pacific region is susceptible to contagion from the highly infectious COVID-19 variants present in India, given the low ratios of vaccination in the region.”

Read: USD/INR Price News: Indian rupee bulls attack three-week-old support line near 74.50

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