Barclays Securities has cut India’s GDP growth forecast for financial year 2021-22 to 10 percent year-on-year from 11 percent earlier due to the fast spreading second wave of COVID-19 pandemic, reported Business Today.

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Barclays researcher Rahul Bajoria and Shreya Sodhani said the economic impact of the second COVID-19 pandemic could be "much higher" in the research note titled ‘India: Tracking COVID-19 and Vaccines,’ the report added.

The researchers are of the view that if Indian states continue with COVID-19 related restrictions till August 2021, it could result in a downside of 120 basis points on annual real GDP growth, dragging FY2021-22 growth to 8.8 percent YoY.

The researchers also predicted that the economic losses could be much higher due to the slow pace of vaccination and lockdowns in various states.

The Barclays note said that there is growing uncertainty around the number of cases and fatalities because of the ongoing second COVID-19 wave in India. It also added, ‘slowing vaccinations are hurting India's recovery prospects.’

India has reported over 3.6 lakh new COVID-19 cases on May 3 and 3,417 deaths in the last 24 hours, according to the health ministry data.

India has started a mass immunisation programme with an aim to cover everyone above the age of 18 but many states have not been able to begin vaccination due to rising supply constraints and logistical challenges.

With India not going for a nationwide lockdown so far, Barclays felt that the economic costs of the current surge in novel COVID-19 cases are much lower than during last year's national lockdown, but the bill is rising, the report said.

(Edited by : Shoma)

First Published:May 3, 2021 6:25 PM IST