THERE is scant downside risk to the Indian economy in the last months of this financial year from the Omicron coronavirus variant, according to economists polled who said New Delhi should focus on fiscal prudence in its February budget.

India is in the midst of a resurgence in coronavirus cases driven by the new variant that has forced most states to impose localized restrictions.

The Jan. 11-18 poll of over 45 economists forecast 5 percent economic growth this quarter, a sharp downgrade from the 6 percent given in December, finishing the year at 9.2 percent compared with 9.5 percent in the previous month’s poll.

But nearly two-thirds of those responding to an additional question, 21 of 32, said there was limited downside to the outlook for the rest of this fiscal year which ends in March.

Nine said it was at risk of downgrades, and two said it was prone to upgrades. The median growth projection for the next fiscal year was upgraded to 8 percent from 7.5 percent a month ago.

“The current phase of restrictions is not as harsh as it was during the previous waves. So, I think Omicron and the economic damage it inflicts will only be limited to this fiscal year,” said Madhavi Arora, lead economist at Emkay Global Financial Services.

Arora reckons the first quarter of the next financial year starting in April will get an extra boost once the third wave passes, assuming it does.

The latest poll also estimated economic growth at 14.7 percent for the same quarter.

(SD-Agencies)