The new Omicron variant of COVID-19 may pose a new risk to the ongoing global recovery. However, preliminary evidence suggests that the Omicron variant is expected to be less severe in India with the increasing vaccination rate, the Treasury Department said in its monthly economic report for November 2021.
India’s economic recovery is expected to gain momentum in the remaining quarters of the fiscal year on the back of optimistic market sentiment, rapid vaccination coverage, strong external demand and continued policy support from the Reserve Bank of India (RBI) and the government, the report said. .
The country’s real gross domestic product (GDP) in the second quarter of the current fiscal year grew 8.4 percent year-on-year and recovered more than 100 percent of pre-pandemic output in the corresponding quarter of the financial year. year 2019-20. India has not only caught up with its pre-pandemic production from the second quarter, but is expected to do so for the full year, according to the Ministry of Finance report.
India is also one of the few countries to record four consecutive quarters of growth during the pandemic (third and fourth quarters of 2020-21 and first and second quarters of 2021-22). The recovery was driven by a rebound in the services sector, full recovery in the manufacturing sector and continued growth in the agricultural sector.
On the demand side, exports and investment were the macro drivers, rising 17 percent and 1.5 percent, respectively, above their pre-pandemic levels. The recovery in private consumption also rose from 88 percent in the first quarter to 96 percent in the second quarter – becoming an emerging macro-growth engine.
On the supply side, while real gross value added (VAT) in agriculture remained above pre-pandemic levels, the manufacturing and construction sectors also surpassed their pre-pandemic levels and became the main drivers of growth.
Meanwhile, Delhi today registered its second case of Omicron as a traveler returning from Zimbabwe tested positive. With the latter case, India has so far registered 33 cases of the new variant which has sparked new concerns worldwide.