HSBC sees wave of viruses slowing Indian economic development this year
Further restrictions in India due to the increase in Covid-19 cases could reduce the country’s economic development by about a quarter of a percentage point in the current fiscal year, as reported by HSBC Holdings Plc. India released its first authority gauge for annual GDP on Friday, which, according to a Bloomberg study of economists, shows a change of 9.3%. This is slower than the 9.5% development projected by the Reserve Bank of India, just like the International Monetary Fund.
Bhandari said the rapid rise in virus cases could delay RBI rate hikes for some time, but the central bank may have to act due to mounting price pressure.
“The economic cost will be there, but hopefully it will only be around a third or less than the economic cost of previous waves,” HSBC economist Pranjul Bhandari said on Friday in an interview with Haslinda Amin and Rishaad. Salamat on Bloomberg TV. “For the full year ending March 2022, GDP growth could be 25 basis points lower than we previously estimated.”
Next week’s data is expected to show consumer price hikes reached 5.8% last month, approaching the top of the RBI’s 4-6% target range, while wholesale inflation remained high at double digits.
The RBI is expected to wrap up its next meeting on February 9.
“This is something that the RBI cannot ignore over the next two months and yet it cannot continue to normalize monetary policy very quickly,” she said. “We think RBI’s normalization is going to be a little smoother, perhaps delayed by a meeting or two.”
Summary of the news:
- HSBC sees wave of viruses slowing Indian economic development this year
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