INSUBCONTINENT EXCLUSIVE:
A separate Reuters survey concluded another wave of infections in India was likely by October.The country's economic rebound, already
weakened in recent months, could lose further momentum as coronavirus variants pose the greatest threat and inflation rises, a Reuters poll
of economists found.The latest survey results suggest difficult policy decisions lie ahead for the Reserve Bank of India, which has already
for the economy had brightened and the inflation rise would be transitory, echoing the views of most major central banks.But the fast spread
of the Delta variant in some states - and it is becoming dominant around the world - has raised doubts as the country contends with a
devastating wave of COVID-19.The July 15-22 poll of 52 economists showed a third consecutive downgrade to the growth outlook for the current
fiscal year 2021-22, but also the third such upgrade to the following year.About two-thirds of economists, or 23 of 36, who responded to an
extra question said virus variants were the biggest risk, while only a handful cited high inflation."Resurgence in cases and (any) emergence
of fresh variants are notable risks for the economy for the rest of the year, particularly at a time when vaccination coverage is short of
achieving a critical mass," said DBS economist Radhika Rao."Reinstatement of movement curbs risks deepening the damage inflicted on the
outlookPhoto Credit: ReutersA separate Reuters survey of global health experts last month concluded another wave of infections and COVID-19
in India was likely by October.After contracting in the previous fiscal year at its fastest annual pace since records began over four
decades ago - one of the worst-hit in Asia, the economy was predicted to expand 9.4% in the current fiscal year
For now, the RBI is expected to keep its policy rates unchanged as inflation appears to be coming off a peak.But the consensus pointed to
two 25 basis point hikes each next fiscal year, taking the repo rate to 4.50 per cent by end-March 2023, with 32 economists now predicting
at least one hike by early that year compared with 24 in the previous poll."Despite the growth concerns, we think the RBI will eventually
need to act to bottle the inflation genie so as not to lose control
We therefore expect monetary policy normalisation to start relatively soon," noted Kunal Kundu, India economist at Societe
Generale."However, with a third wave of the pandemic appearing to be a certainty, with experts pointing to the less than desirable pace of
vaccination, the precise timing of normalisation remains uncertain."
