“States are easing lockdowns based on lower test positivity rates rather than vaccination progress,” Priyanka Kishore, head of India and South East Asia Economics at Oxford Economics, wrote in a report to clients. “This risky strategy increases the chances of renewed outbreaks that would further delay the recovery.”
Provinces including national capital New Delhi have begun reopening amid signs of infections plateauing, 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 virus wave.
“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