In its report titled 'Macroeconomics – India: Economic shocks from second COVID wave will not be as severe as last year's, Moody's said high-frequency economic indicators show that the second wave of COVID-19 infections hit India's economy in April and May.
Moody's said in the report that, "the virus resurgence adds uncertainty to India's growth forecast for 2021; however, it is likely that the economic damage will remain restricted to the April-June quarter. We currently expect India's real GDP to grow at 9.6% in 2021 and 7% in 2022."
Further, Moody’s stating that stringent lockdowns in economically significant states will mar April-June quarter economic activity. It also said the 10 states that have been hardest hit by the second wave collectively account for more than 60% of the pre-pandemic level of India's GDP.
Moody's mentioned in the report that it expects the overall hit to India's economy to be softer than that during the first wave last year. However, the pace of recovery will be determined by access to and delivery of vaccines, and the strength of the recovery in private consumption, which could be hampered by the deterioration of balance sheets of low- and middle-income households from job, income and wealth losses, it added.