Virus Surge In India Could Hurt Recovery From Rare Recession: Economists

Kaushik Das, chief India economist at Deutsche Bank AG in Mumbai, says if cases continue to surge, it will cost the economy and the impact on growth will be felt in the April to June quarter

A surge in coronavirus cases in India could hurt the economy's recovery from a rare recession, as curbs to avoid a new wave creates delays in putting millions who lost their jobs to the pandemic back to work. "There is a restless urgency in the air in India to resume high growth, and incoming data point to even contact-intensive services such as personal care, recreation and hospitality gathering traction," central bankers led by Deputy Governor Michael Debabrata Patra wrote in the Reserve Bank of India's latest monthly bulletin. But "another outbreak, more lockdowns and restraints, will get unbearable in spite of learning from the initial experience of living with the virus." That's seen as a cautionary footnote to the RBI's earlier year-on-year growth projection of 26.2 per cent for the April to June quarter. Kaushik Das, chief India economist at Deutsche Bank AG in Mumbai, says if cases continue to surge, it will cost the economy and the impact on growth will be felt in the April to June quarter. "Anticipating such a possible uptick in Covid-19 cases, we have already taken relatively lower real GDP growth estimate for April-June of 25.5 per cent year-on-year," he said, compared to the RBI's forecast.