‘2nd wave a humanitarian crisis’

NOMURA REPORT

‘2nd wave a humanitarian crisis’

TIMES NEWS NETWORK

New Delhi:21.05.2021 

Japanese investment bank and brokerage firm Nomura has said the second wave of Covid is a humanitarian crisis in India rather than an economic one and expects the impact of localised lockdowns to be less severe than last year.

“The hit to mobility due to the state-wide lockdowns has been steep, and the economic impact is likely to be most severe in May. However, we expect the overall hit to sequential growth in Q2 (April-June) to be much less severe than last year and less than what the drop in mobility suggests, as lockdowns are more nuanced this time and consumers and businesses

have adapted, a view supported by international evidence,” Nomura said in its Asia special report.

“Stronger global growth is also currently a tailwind, which was not the case last year. We expect lockdowns to last for around six weeks and be followed by selective reopening in June, which should result in better sequential growth,” the report said.

The RBI is also of the view that the impact of the second wave on the economy is likely to be less severe this year compared to last year when there was strict lockdown across the country.

Nomura said it expects the pace of vaccinations to accelerate after June. “We expect half of the population to be fully vaccinated by end-2021 and India to reach its vaccine pivot point in Q3, which should boost domestic consumption,” the report said.

French investment bank Societe Generale said that the second wave would have a disproportionately high impact on demand than on supply, which might linger for a few quarters more.

It said this had forced them to revise down their growth forecast for FY22 to 8.5% from 9.5%.