The rush by India’s states to end lockdowns as new coronavirus infections (Covid-19) drop, rather than waiting for vaccination rates to rise, risks triggering fresh restrictions and holding back the nation’s recovery, according to global forecasting firm Oxford Economics.
“States are easing lockdowns based on lower test positivity rates rather than vaccination progress. This risky strategy increases the chances of renewed outbreaks that would further delay the recovery," Priyanka Kishore, head of India and South East Asia Economics at Oxford Economics, wrote in a report to clients.
The report said that provinces including national capital New Delhi have begun reopening amid signs of Covid-19 infections decreasing, causing mobility rates to improve as of mid-June. While that’s likely to foster return of some demand in the near-term, there’s the risk of consumption and business activity suffering going ahead should newer restrictions be placed to control a resurgent coronavirus wave.
With only 3.9% of India’s population fully vaccinated, Kishore sees economically important states, including Maharashtra and Tamil Nadu not yet reaching the “safe” levels of vaccination.
“The vaccine situation keeps our outlook cautious,” said Kishore, who maintained India’s growth forecast for this year at 9.1% -- a pace slower than the 9.5% predicted by the nation’s central bank. “Economic data also doesn’t support an upward revision to our growth expectations at this point,” she added.
{{/usCountry}}“The vaccine situation keeps our outlook cautious,” said Kishore, who maintained India’s growth forecast for this year at 9.1% -- a pace slower than the 9.5% predicted by the nation’s central bank. “Economic data also doesn’t support an upward revision to our growth expectations at this point,” she added.
{{/usCountry}}Earlier on Wednesday, it said that states' re-opening strategy in the wake of decline in Covid-19 cases is not "prudent" and might even result in rise in infections as vaccine coverage remains low in many states.
The Oxford Economics also said that vaccination rates are far below the levels deemed to be safe for easing social distancing measures substantially in the more populous and economically important states.
"... we think this reopening strategy is not prudent and may result in a renewed rise in infections and re-tightening of restrictions in the future," the report added.
According to the report, re-opening has commenced at a faster pace than it had anticipated as states have focused on declining test positivity rates as the guiding factor for easing measures rather than the share of population vaccinated.