Fitch Ratings on Monday warned that India’s slow pace of vaccination could mean that the country remains vulnerable to further waves of the pandemic even once the current surge subsides.
Just 9.4 per cent of the population had received at least one vaccine dose as of May 5, according to figures from Our World in Data, the agency said.
“India’s slow pace of vaccination means that the country could remain vulnerable to further waves of the pandemic even once the current surge subsides,” Fitch added.
The Centre has already provided more than 17.56 crore vaccine doses to states/UTs free of cost.
The cumulative number of Covid-19 vaccine doses administered in the country exceeded 16.94 crore on May 9.
The global rating agency said there are growing indications that the latest wave of coronavirus infections will add to risks among financial institutions (FIs).
It also anticipates that the RBI may introduce additional measures to support the financial sector if indications of economic stress mount.
“We expect the shock to economic activity from the latest wave of the pandemic in India to be less severe than in 2020, even though caseloads and fatalities are much higher.
“Nonetheless, indicators show activity dropped in April-May, which is likely to delay the country’s recovery, and the number of newly recorded cases remains extremely high,” Fitch Ratings said in a report.
It said that currently, authorities are implementing lockdowns more narrowly, and companies and individuals have adjusted behaviour in ways that cushion the effects.
“There is a risk that disruption could persist longer and spread further than our baseline case assumes, particularly if lockdowns are introduced in more regions, or nationwide,” it added.
India is facing the world’s worst outbreak of COVID-19 cases with more than 3 lakh new daily COVID-19 cases being reported for two weeks now and the new cases reached more than 4 lakh new daily cases over the weekend.
More than 2.46 lakh people in India have died from the coronavirus infection. Public health system is buckling under the weight of surging infections and deaths with several parts of the country reporting shortage of hospital beds, medical oxygen, medicines and vaccines.
Last month, Fitch had said the surge in COVID-19 cases could add to headwinds facing India’s banks and non-bank financial institutions (NBFIs) if it led to a resurgence in asset-quality pressures.