A brokerage report says – “Lockdowns imposed by the states in April and May to contain the second wave of the deadly COVID-19 pandemic has likely led to the economy contracting 12 per cent in the June quarter as against 23.9 per cent contraction in the same quarter in 2020”.
The economy had its worst contraction on record in FY21 at 7.3 per cent as the 2.5 months of unplanned lockdown announced by the Centre with just a four-hour notice had crippled the economy in the first quarter with a massive 23.9 per cent contraction, which improved to -17.5 per cent in the second quarter.
This 12 percentage point contraction will have the economy missing a sharp V-shaped recovery this time around, unlike seen last year after the national lockdown was lifted, as consumer sentiment remains very weak this time around as people are more worried about the pandemic than last year, says Swiss brokerage UBS Securities India.
“Unlike the V-shaped recovery in 2020, we expect the economy to have only a gradual recovery this time, as consumer sentiment remains weak on pandemic-related uncertainties. That said, we expect economic recovery to gain momentum from H2 as we see vaccination ramp up and the resultant control of the pandemic lifting consumer and business confidence” says Tanvee Gupta, economist at Swiss Brokerage.
Our hopes still bid high on the Vaccination as there is a positive momentum on the ground on the vaccination front which has improved to 3.2 million doses daily in the week to June 13 from 2.5 million as of end-May.