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Monthly output loss widened in mid-April
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SME Times News Bureau | 13 May, 2021
Resurgence of Covid-19 has changed India's macroeconomic narrative from
being a linear V-shaped recovery in FY22 to being a story of a lost
quarter, says Emkay Global in a report.
Accordingly, the report
cited that amid increasing geographical spread of virus, the bottom-up
projections now suggest that for every month of current localised
lockdowns, the output loss would now be Rs 1.25 lakh crore from Rs
75,000 crore as per the restrictions seen in mid-Apr 2021.
"The
fall in secondary and tertiary sector capacity utilisation varies
between 10 per cent and 40 per cent among states," said Madhavi Arora,
Lead Economist, Emkay.
She said the estimates imply a monthly
loss of GVA growth by 90 basis points compared with loss of more than 40
basis points in output growth per month during Covid-I lockdown.
"Clearly, factors such as better adapted firms and policy response,
stable financial conditions, vaccine drive, pent-up demand release and
robust global growth spillovers create growth buffers," she said.
"Assuming Covid-II peaks in May'21 and restrictions ease by Q2FY22, we
mark down our FY22 GDP forecast to 9.9 per cent from 11 per cent
earlier."
However, she pointed out that the situation is still
in a flux, but as per current dynamics the expected Q1FY22 annualised
growth is seen at 16.5 per cent from more than 22 per cent estimated
before the second wave.
Their estimated monthly loss of output
of 0.9-1 per cent of GDP is much higher than the estimated welfare cost
of universal vaccination at 0.6-0.7 per cent of GDP, thus making a
successful vaccine strategy the cheapest policy path to economic
normalisation.
Lately, India reported record new daily increases
in coronavirus infections, prompting new lockdowns and restrictive
measures to curb the spread of the pandemic.
The exponential
rise in new coronavirus cases in India is a humanitarian crisis. It also
raises concerns about the country's economic recovery and currency
fluctuations.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
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87.50
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84.65 |
Euro
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78.25
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75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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