India: FY22 growth estimate cut by 80 bps on Omicron-fuelled third covid wave – Citibank

The Omicron-fuelled third COVID-19 wave in India prompted Citigroup to revise down the country’s FY22 growth forecast by 80 basis points
(bps) to 9%, Chief India Economist Samiran Chakraborty noted.

Key quotes

“While the economic impact of the Omicron wave in 4QFY22 (Jan-March) could be lower than previous waves, the activity momentum in 3QFY22 was much lower than our expectation.”

“Downgrades its real GDP growth forecast for FY23 to 8.3% against 8.7% earlier.”

‘Still, lower hospitalization rates, shorter Covid wave cycle period, higher vaccination coverage and weakening link between Covid and activities give enough reasons to be hopeful of a less-disruptive Covid wave.”

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