SBI cuts FY22 GDP growth estimate to 7.9% on fear of third COVID wave

New Delhi: The State Bank of India has come out with its latest 'Ecowrap' report detailing India's economic profile amid the pandemic.

SBI in its report draws a downward revision of real gross domestic product (GDP) projection for fiscal 2022 to 7.9 per cent from the earlier 10.4 per cent.

However, the report projects "an upward bias" to this number with the "fervent hope" of one crore vaccinations per day beginning mid-July as per government projections.

The SBI's analysis only shows a modest rise in growth as Covid- 19 pandemics has brought "disproportionately larger impact on the economy this time" and given that rural is not resilient as urban, any rise in demand is unlikely to make a large difference in GDP estimates for fiscal 2022.

The report also warns that the intensity of a COVID-19 third wave in India will be as severe as that of the second wave following the trends in other countries. Hence, the bank called for priority vaccination of children and teens in the 12-18 age group, who could be the next vulnerable group for infections.

Highlighting the importance of vaccination, SBI reports suggest if the country could be better prepared for the third wave, we can reduce the serious case rate from 20 per cent to 5 per cent (due to better health infrastructure and rigorous vaccination) in the third wave, which would eventually reduce the number of deaths to 40,000 as compared to current deaths of more than 1.7 lakh.

Further, as children could possibly be the next vulnerable group, the government-run bank advises the country to go for an advanced procurement strategy like that adopted by developed nations to inoculate around 15-17 crore children in the 12-18 age bracket.