India’s growth this year could slip to 8.2% if COVID-19 cases continue to rise till the end of June, rating agency Crisil said as economic risks from the second wave escalate.
The agency, which had estimated 11% growth for FY22, said that its ‘base case’ will hold true only if the surge in COVID-19 cases and lockdowns across the country peak by mid-May and ‘risks are firmly tilted to the downside’ at this point.
In a moderate risk scenario, if cases and lockdowns peak by May-end, Crisil expects growth to be 9.8% for the year. Industry’s revenue growth projections of 15% for the year will hold even in this scenario, it said.
But growth could be as low as 8.2% in a severe downside scenario, with industry revenue growth likely to be significantly lower at 10%-12%, it said in a report.
While the economy was expected to return to pre-pandemic levels by September, Crisil now expects the catch-up to be pushed beyond the September quarter in both the moderate and severe scenarios.
Though the lockdowns are less restrictive than last year, the agency pointed out they are expanding. Moreover, caseloads spreading to rural areas where healthcare infrastructure is weak are a worry.
