India’s economy may shrink in Q2 as the number of Covid-19 cases is on the rise.
The country reported another 323,144 cases on Tuesday, and five straight days or record new daily cases, bringing the country’s cumulative infections to more than 17.6 million.
Sonal Varma, India chief economist at Nomura, predicted that the country’s GDP would shrink about 1.5% in Q2.
Despite the situation, the economy might grow more than 24% compared with the Q1 of 2020, Varma said, adding that that’s because India’s GDP fell nearly 24% in the same period last year.
While uncertainty remains, she said Q2’s contraction should not be generalised as the outlook for the country’s full year economic growth.
Varma believes that India’s economy could start to recover relatively quickly as the country has a big plan to quicken vaccination after June.
Earlier this month Nomura cut the 2021 GDP forecast for India to 11.5% from the earlier 12.4%.