The mounting crisis from resurgence of COVID-19 cases in India has dented support for the ruling BJP but voter support for Prime Minister Narendra Modi and his party will remain strong over the coming quarters and through this humanitarian crisis, Fitch Solutions said Thursday.
India's GDP is expected to grow 9.5% this financial year, Fitch Solutions has said, adding that there are downside risks to the forecast due to the surge in COVID-19 cases and extension and expansion of localised lockdowns.
The agency's forecast is 100 basis points lower than the Reserve Bank of India's projection for the year. Fitch Solutions said the economic impact of the second wave of the COVID-19 pandemic is likely to be less severe than that in AprJun 2020 despite at least 11 states and Union territories imposing several restrictions.
"While containment measures will weigh on India's ongoing economic recovery, the localised nature of restrictions mean that the actual impact is likely to be much less severe relative to first quarter of 2020-21 (Apr-Mar)," it said. The second wave of the COVID19 pandemic has ravaged the country, with many cities facing acute shortage of hospital beds, oxygen, and life-saving drugs. India reported 412,262 new cases today, the world's highest surge in a single day since the outbreak of the pandemic.