COVID-19 Toll On Economy Deepens, Job Crisis To Worsen: Report

The May 20-27 poll showed the outlook for the current quarter was lowered to 21.6 per cent annually, and to 9.8 per cent on average for this fiscal year

The country's economic outlook has weakened again, albeit slightly, with worst-case scenario forecasts suggesting the toll from the coronavirus pandemic could be much deeper, stoking fears the job crisis may worsen over the coming year, a Reuters poll found. Renewed restrictions to curb the current coronavirus wave have stalled economic activity, leaving many millions out of work and pushing economists - who have broadly been bullish - to downgrade their views for the second time since early April. The May 20-27 poll showed the outlook for the current quarter was lowered to 21.6 per cent annually, and to 9.8 per cent on average for this fiscal year, down from 23.0 per cent and 10.4 per cent respectively a month ago. The economy was then forecast to grow 6.7 per cent next fiscal year, compared to 6.5 per cent predicted previously. While the consensus pointed to healthy growth figures later this year, all 29 economists, in response to an additional question, warned the outlook was either "weak and prone to further downgrades" or "fragile, with a limited downside". None expected a "strong recovery, followed by an upgrade". "Recovery in India was strong in the months before the second wave. This leads us to believe the recovery can rebound quickly after the number of new infections have come down. But vaccination implementation needs to pick up pace in order to have an effect this year," said Wouter van Eijkelenburg, an economist at Rabobank.