Omicron Threatens Indian Economy: The resurgence of Corona is causing widespread concern around the world. India is not immune to this; cases of the Omicron variety of COVID-19 are being reported on a regular basis in the country. This is why the domestic rating firm India Ratings amended and decreased its GDP growth prediction.
The resurgence of Corona is causing widespread concern around the world. India is not immune to this; cases of the Omicron variety of Kovid-19 are being reported on a regular basis in the country. This is why the domestic rating firm India Ratings amended and decreased its GDP growth prediction.
The current fiscal year’s growth rate will be 9.3 percent.
Cases of the new coronavirus strain Omicron are fast increasing all over the world, including India. Meanwhile, India’s economic growth prediction for the current fiscal year has been reduced by the domestic rating agency, India Ratings and Research. According to India Ratings, due to the rapid spread of Omicron illness, many governments have begun enforcing limits as a precaution. This will have an influence on economic and corporate operations, potentially lowering the growth rate for the current fiscal year by 0.10 percent to 9.3 percent.
In the previous 15 days, there has been a significant surge in new cases.
While lowering its estimate of GDP growth, the agency stated in its report that the number of new cases has increased in the last 15 days. In such a case, due to the rapid speed of infection, the country’s growth rate might fall to 5.7 percent in the fourth quarter. It is worth mentioning that India Ratings had previously anticipated GDP growth of 6.1 percent, which has subsequently been reduced. According to the agency, the restrictions imposed due to the increasing cases of coronavirus will have a negative impact on the economy’s ongoing recovery.
Restrictions have an impact on economic operations.
According to India Ratings and Research, with Omicron cases continuing to rise, restrictions in various forms, such as night/weekend curfews to lower the capacity of markets/market complexes and check human mobility/contact, have already begun in numerous states, impacting economic operations. The rating agency, however, stated that the indicators so far show that the infection is small and, in most cases, not life-threatening. Local government restrictions will be less disruptive than the first two waves of COVID-19. In such a case, it is hoped in the report that once the third wave of Corona subsides, the economy will recover quickly.
The Reserve Bank of India will maintain its current accommodative policy stance.
Along with reducing the GDP growth projection because to the escalating epidemic of Corona, the rating agency has stated that it anticipates the Reserve Bank of India (RBI) to maintain its current accommodative policy stance, with no change in policy rate in the foreseeable future. And the Center will be in no hurry to re-establish fiscal discipline.