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The rise in infections dampens the country's economic recovery with several indicators losing momentum.
India is going through the second wave of the COVID-19 pandemic as the single-day spike crossed 400,000 cases last week, and the total tally almost reached 20 million. Amid the prevailing conditions, the overall Indian economy, mired in a recession since last year, has been dragged down further by this second wave.
Most industries and the manufacturing sector are either shut or working at a much lesser capacity. The workforce in non-essential services has moved back home and is working online. Once again, offices have been closed and supplementary businesses depending on corporate employees, like the food and hospitality sector, have been hit hard.
In a bid to curb the raging pandemic, over 10 states have imposed partial or complete lockdowns, and five states are observing night curfews.
While essential services are allowed to operate, the rest have been shut till further notice. The work-from-home mode is encouraged, and people are suggested to stay indoors unless it is very urgent to step out.
Last month, global rating agency Moody's stated that India's gross domestic product (GDP) was still likely to grow in the double digits in 2021. The International Monetary Fund (IMF) raised its growth forecast for the Indian economy to 12.5 percent from 11.5 percent estimated in January. However, it mentioned that the forecast faced downside risks due to the second wave.
Meanwhile, India's own rating agency ICRA had forecast that the country's GDP would grow by 10-10.5 percent in the financial year 2021-22. It also stated that the present wave will dampen the recovery pace for India.
S&P Global Ratings stated at the end of April that it may revisit its growth projection of 11 percent for India this year, and added that the rise in infections dampens the country's economic recovery with several indicators losing momentum.