From out-performer to laggard: COVID endangers India recovery

Data suggest a worsening contraction in retail activity as India suffers record numbers of COVID infections.

Just two weeks ago, the International Monetary Fund upgraded India’s economic growth forecast to 12.5% — the quickest rate among major economies. Now, as Covid-19 cases surge the most globally, that bullish view is looking increasingly in doubt. In Delhi, India’s political capital, the streets are mostly empty and the markets nearly deserted with almost all shops closed in response to curbs put in place by the local administration to fight the pandemic. The scene is not so different in Mumbai, the financial hub that accounts for 6% of the national output. Yet for now, Prime Minister Narendra Modi is shunning a nationwide lockdown and encouraging states to keep their economies open. And for that reason, economists are signaling risks to their forecasts, but not tearing them up all together just yet.