The second wave of COVID-19 may have a more lasting damage on the Indian economy and exports will once again be the foundation for recovery, Moody's Analytics said on Monday.

In its report titled 'APAC Economic Outlook: The Delta Roadblock', Moody's Analytics said social distancing is weighing on the current quarter, but economic recovery will resume by the year-end.

The Delta variant of COVID-19 is among factors now adversely affecting economies of the Asia-Pacific (APAC) region, but the economic hit from the current round of movement restrictions in the region will not be as severe as the recessions in the second quarter of last year.

In India, where exports make up relatively small shares of the economy, high commodity prices have boosted the value of exports. This is one factor that helped reinvigorate India after its first devastating wave of COVID-19.

"While its second wave, which is now coming to an end, may have more lasting damage to the economy as the pandemic's one-two punch hit small enterprises very hard, exports will once again be the foundation for recovery," it said.

With regard to vaccination, Moody's Analytics, which is a financial intelligence company,  said India is struggling to accelerate its pace of inoculation.

The global economic recovery is continuing at a solid pace, but parts of Asia will not reflect this in the near term given heightened social distancing restrictions now in place, particularly in Southeast Asia as the Delta variant of COVID-19 spreads across the region, it said.

Moody's Analytics said global GDP this year will be in the range of 5-5.5 per cent, well above its 3 per cent potential growth rate as recovery continues from last year's pandemic recession.

"Global trade continued its rapid recovery well into this year's second quarter. Global industrial production also is still rising, although now at a slower pace than merchandise trade as tie-ups in global supply chains slow many manufacturing processes," it added.