According to a lender’s report, the second wave of the pandemic could peak “about 20 days from now.”
The State Bank of India’s business activity index has dropped below its pre-pandemic pace, owing to city and state lockdowns and restrictions aimed at slowing the outbreak.
The in-house Index of India’s largest bank fell to 75.7, the lowest level since August 2020, “and now a strong 24.3 percent below pre-pandemic levels.”
The index shows that all indicators, with the exception of labour participation and electricity use, fell significantly in April.
According to Soumya Kanti Ghosh, the lender’s chief economic advisor, “labour market disturbances are still manageable, unlike the first wave” of the pandemic.
SBI forecasts a real GDP (gross domestic product) growth of 10.4% in FY22 and a nominal GDP growth of 14.2%. The Reserve Bank of India’s (RBI) growth forecast is 10.5 percent, but analysts, including those at SBI, have begun to lower their growth forecasts.
The pandemic’s second wave has wreaked havoc on the region, but SBI estimates that it will peak “about 20 days from now,” based on data and experience from India and other countries.
“We expect the second wave will peak around mid-May, with active cases reaching around 3.6 million at that time,” according to SBI.
Since most vaccine production costs are set, the cost per dose for larger batches is lower than for smaller batches. It said that differential pricing was justified in order to “lure foreign vaccine manufacturers to India,” and that vaccine prices would fall as supply increased.
“We believe a total of 1.048 billion doses can be provided in India by October 2021, in which 15% of the population can be completely vaccinated and 63 percent will get their first shot,” Ghosh wrote in his study, adding that other countries’ experience shows infections stabilise after 15% of the population is fully vaccinated.
According to SBI, “in a country like India, where demographics vary from state to state, city to city, and even neighbourhood to neighbourhood, a highly decentralised solution seems most logical.”
