Global forecasting firm Oxford Economics on Monday revised downwards its India GDP growth forecast for 2021 to 10.2 per cent from 11.8 per cent previously, citing the country’s escalating health burden, faltering vaccination rate and lack of a convincing government strategy to contain the pandemic.
Oxford Economics also said that notwithstanding the likelihood of further mobility restrictions, it expects India’s targeted lockdown approach, less stringent restrictions, and resilient consumer and business behaviour to mitigate the economic impact of the second wave.
“India’s escalating health burden, faltering vaccination rate, and lack of a convincing government strategy to contain the pandemic have prompted us to downgrade our 2021 GDP growth forecast to 10.2 per cent from 11.8 per cent previously,” it said.
The global forecasting firm added it expects GDP to contract sequentially in the second quarter.
“But if struggling health systems force more states to resort to stricter lockdowns like Maharashtra, we will likely lower our growth forecast further,” it added.
Oxford Economics said India’s health system has collapsed in the worst-hit states, with even the national capital Delhi facing acute shortage of oxygen and COVID-19 hospital beds. “While the official mortality rate has edged lower, it masks a rapidly rising death count. Deaths are now doubling every ten days (as opposed to an average of 29 days in the first wave) and even this figure is likely buttressed by delayed or under-reporting of deaths.” it noted.