Commuters wait to board a train in New Delhi. The rise in Omicron cases has forced government to restrict passenger numbers on public transport. EPA
Commuters wait to board a train in New Delhi. The rise in Omicron cases has forced government to restrict passenger numbers on public transport. EPA
Commuters wait to board a train in New Delhi. The rise in Omicron cases has forced government to restrict passenger numbers on public transport. EPA
Commuters wait to board a train in New Delhi. The rise in Omicron cases has forced government to restrict passenger numbers on public transport. EPA

Can India’s economy withstand a third Covid-19 wave?


  • English
  • Arabic

The rapid spread of the Omicron coronavirus variant among India's population of more than 1.3 billion people is not a good omen for the country's economic recovery, with businesses facing growing uncertainty as the new year begins.

The possibility of a significant rise in infections and a tightening of pandemic-related restrictions threatens to derail the economy at a time when businesses in Asia's third-largest economy have started to recover from a historic recession.

“The advent of Omicron has clouded the economic outlook for 2022,” says Arun Singh, global chief economist at analytics and insights company Dun and Bradstreet.

“We expect the pace of growth to slow down” in India in the first half of the year as the infection rate continues to climb.

New Covid-19 curbs “will intensify supply bottlenecks, further aggravating inflationary pressures and weigh upon the optimism and consumer demand”, says Mr Singh.

Similar to other countries that are already suffering from the economic fallout caused by the new variant, India is also expected to experience the knock-on effects of what happens to the global economy, including on its import and export trends.

India fell into a recession in 2020 after New Delhi imposed one of the world's strictest lockdowns, disrupting business across the country.

However, activity picked up in 2021 and the economy managed to reverse the trend despite the country battling a deadly second wave of infections, which peaked in May and prompted authorities to reintroduce many Covid-19 restrictions.

The resurgence of the virus was a setback last year but the economic impact was not as severe as many businesses adjusted to the new normal.

The latest official data, for the quarter to the end of September, showed that India's gross domestic product grew by 8.4 per cent. Although this was compared to a low base from the previous year, it meant that the country was the fastest growing major economy in the world.

In a report published last week, the Centre for Economics and Business Research predicted that India will regain its position from France as the world's sixth-largest economy this year and become the third largest by 2031.

.
.

It is still too early to ascertain the extent to which Omicron will affect India. Many business leaders view it as a significant risk as the latest variant continues to spread at a rapid rate.

“It is possible that even a limited scare could somewhat upset the recovery", as another round of restrictions looms, says Suyash Gupta, director general of industry body the Indian Auto LPG Coalition.

India’s reported number of new daily infections increased to 22,775, according to data released by the country’s Ministry of Health on Saturday. At the same time, only two thirds of India's adult population had been fully vaccinated against Covid-19 as of Saturday.

“The new variant Omicron stands as a definite hurdle to the economic recovery,” says Ambrish Kumar, founder of digital logistics platforms Zipaworld and group chief executive of solutions company AAA 2 Innovate.

“Further lockdowns and other restrictions would lead to supply chain and logistic challenges that would affect exports and further increase the trade deficit.”

Several states in India have already introduced new Covid-19 restrictions while travel rules have been tightened due to the Omicron variant.

“Business activities could face headwinds,” says Srividya Kannan, founder and director of Bengaluru-based digital solutions consultancy Avaali Solutions. “Hopefully, we should be better prepared via lessons [learnt] from the past.”

The slowing momentum comes after her company enjoyed strong growth in 2021 as businesses pivoted to technology and digitisation to counter the effects of the pandemic.

While some sectors remain optimistic that they can weather the storm, Omicron remains a significant threat − considering the recovery so far has been "uneven across sectors and across regions”, Mr Singh says.

“Rising inflationary pressures and faltering of growth momentum could widen this uneven growth” divide if Omicron continued to spread, he says.

Many “employment-intensive sectors”, including hospitality and transport, are still below their pre-pandemic levels, and with the new variant on the rise, the travel and tourism sector is also expected to come under renewed pressure in 2022, he says.

There are also concerns about the impact a resurgence in infections and new restrictions could have on consumer spending. India is a consumption-driven economy and although demand has been recovering, economists say it has yet to return to pre-pandemic levels.

Ritesh Goenka, group managing director of Indian consumer electronics brand Just Corseca, says Omicron is “the biggest point of concern”.

After taking a massive hit in 2020 due to the pandemic, 2021 was "our best year in terms of business, tech and innovation”, says Mr Goenka.

But “as the cases of Covid are, again, shooting up, it looks like the consumers’ needs and daily lifestyle will go through a sea change”.

He is particularly worried about the effect that this could have on inflation, which would weaken consumers' spending power.

The potential fallout of Omicron forced the Reserve Bank of India to keep interest rates on hold in December, rather than increase them to tame inflation, as countering the risk to the economy became the bigger priority for the central bank.

.
.

Borrowing costs are still low in the country and there are widespread concerns that this could allow inflation to further rise in the coming weeks and months.

Higher crude oil and other commodity prices have already fuelled inflation and weighed heavy on companies in 2021. Business will certainly be keeping a close eye on them in the new year.

“The turbulent oil and energy market is one of the major factors that will affect both businesses and economies in 2022,” says Mr Kumar.

If Omicron does not wreak havoc, as many expect it would, economists say the RBI will consider raising interest rates in 2022 to counter rising consumer prices.

Aside from the virus and energy-driven inflation, businesses in India are feeling the pressure from the US Federal Reserve's plans to decrease its policy support and raise interest rates this year.

This will have indirect implications for companies in India as it would raise the cost of borrowing for businesses in the international market. It could also slow foreign capital flows to the Indian stock market, which already has higher valuations than its peers in Asia.

After “a super show in 2021, valuation levels in Indian equities could make most people cautious on India within emerging markets and Asia”, says Deepak Jasani, head of retail research at HDFC Securities.

India's benchmark BSE Sensex index surged to record highs in 2021 as investors bagged the best gains in four years, helped by investment from overseas. The benchmark S&P BSE Sensex stock index rose 0.8 per cent on Friday to end the year at 58,253.82.

This represented a 22 per cent surge for the year. However, the benchmark is down by about 7 per cent from its October highs.

“Indian equities are running into many challenges, including the US rate cycle, rising oil prices, elections in key states, potential Covid wave [number] three and an upward inflection in domestic interest rates,” says Mr Jasani.

In the first half of 2022, “the market could cool off as it absorbs the gains of the preceding 18 months … [but] it still has potential to positively surprise”, he says.

Indian equities are running into many challenges, including the US rate cycle, rising oil prices, elections in key states, potential Covid wave [number] three and an upward inflexion in domestic interest rates
Deepak Jasani,
head of retail research, HDFC Securities

Amid expectations of the Fed unwinding its stimulus programme, the Indian rupee is also coming under pressure.

The currency traded at 74 against the US dollar on Friday, off its near record lows in December when it breached 76. Fitch Solutions forecasts the rupee will average about 76 against the dollar in 2022.

However, a significant amount of uncertainty remains on how the situation will unfold for investors and for businesses.

“Right now, we do not really know the extent of the damage that Omicron is capable of in the coming weeks and months in terms of health implications, as well as for the economy,” says Mr Gupta.

But he and many others are trying to remain hopeful that the variant will not prove to be deadly, which would enable the economy to “continue to forge ahead, remaining on its path of recovery and revival”.

.
.
UK-EU trade at a glance

EU fishing vessels guaranteed access to UK waters for 12 years

Co-operation on security initiatives and procurement of defence products

Youth experience scheme to work, study or volunteer in UK and EU countries

Smoother border management with use of e-gates

Cutting red tape on import and export of food

2018 ICC World Twenty20 Asian Western Sub Regional Qualifier

Event info: The tournament in Kuwait is the first phase of the qualifying process for sides from Asia for the 2020 World T20 in Australia. The UAE must finish within the top three teams out of the six at the competition to advance to the Asia regional finals. Success at regional finals would mean progression to the World T20 Qualifier.

Teams: UAE, Bahrain, Saudi Arabia, Kuwait, Maldives, Qatar

Friday fixtures: 9.30am (UAE time) - Kuwait v Maldives, Qatar v UAE; 3pm - Saudi Arabia v Bahrain

Ferrari 12Cilindri specs

Engine: naturally aspirated 6.5-liter V12

Power: 819hp

Torque: 678Nm at 7,250rpm

Price: From Dh1,700,000

Available: Now

Dust and sand storms compared

Sand storm

  • Particle size: Larger, heavier sand grains
  • Visibility: Often dramatic with thick "walls" of sand
  • Duration: Short-lived, typically localised
  • Travel distance: Limited 
  • Source: Open desert areas with strong winds

Dust storm

  • Particle size: Much finer, lightweight particles
  • Visibility: Hazy skies but less intense
  • Duration: Can linger for days
  • Travel distance: Long-range, up to thousands of kilometres
  • Source: Can be carried from distant regions
MATCH INFO

Norwich 0

Watford 2 (Deulofeu 2', Gray 52')

Red card: Christian Kabasele (WatforD)

Washmen Profile

Date Started: May 2015

Founders: Rami Shaar and Jad Halaoui

Based: Dubai, UAE

Sector: Laundry

Employees: 170

Funding: about $8m

Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures

Moving%20Out%202
%3Cp%3E%3Cstrong%3EDeveloper%3A%3C%2Fstrong%3E%20SMG%20Studio%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20Team17%3Cbr%3E%3Cstrong%3EConsoles%3A%3C%2Fstrong%3E%20Nintendo%20Switch%2C%20PlayStation%204%26amp%3B5%2C%20PC%20and%20Xbox%20One%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
About Karol Nawrocki

• Supports military aid for Ukraine, unlike other eurosceptic leaders, but he will oppose its membership in western alliances.

• A nationalist, his campaign slogan was Poland First. "Let's help others, but let's take care of our own citizens first," he said on social media in April.

• Cultivates tough-guy image, posting videos of himself at shooting ranges and in boxing rings.

• Met Donald Trump at the White House and received his backing.

SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
%3Cp%3E%3Cstrong%3EProcessor%3A%3C%2Fstrong%3E%20Apple%20M3%2C%208-core%20CPU%2C%20up%20to%2010-core%20CPU%2C%2016-core%20Neural%20Engine%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EDisplay%3A%3C%2Fstrong%3E%2013.6-inch%20Liquid%20Retina%2C%202560%20x%201664%2C%20224ppi%2C%20500%20nits%2C%20True%20Tone%2C%20wide%20colour%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMemory%3A%3C%2Fstrong%3E%208%2F16%2F24GB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStorage%3A%3C%2Fstrong%3E%20256%2F512GB%20%2F%201%2F2TB%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EI%2FO%3A%3C%2Fstrong%3E%20Thunderbolt%203%2FUSB-4%20(2)%2C%203.5mm%20audio%2C%20Touch%20ID%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EConnectivity%3A%3C%2Fstrong%3E%20Wi-Fi%206E%2C%20Bluetooth%205.3%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBattery%3A%3C%2Fstrong%3E%2052.6Wh%20lithium-polymer%2C%20up%20to%2018%20hours%2C%20MagSafe%20charging%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ECamera%3A%3C%2Fstrong%3E%201080p%20FaceTime%20HD%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EVideo%3A%3C%2Fstrong%3E%20Support%20for%20Apple%20ProRes%2C%20HDR%20with%20Dolby%20Vision%2C%20HDR10%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EAudio%3A%3C%2Fstrong%3E%204-speaker%20system%2C%20wide%20stereo%2C%20support%20for%20Dolby%20Atmos%2C%20Spatial%20Audio%20and%20dynamic%20head%20tracking%20(with%20AirPods)%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EColours%3A%3C%2Fstrong%3E%20Midnight%2C%20silver%2C%20space%20grey%2C%20starlight%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIn%20the%20box%3A%3C%2Fstrong%3E%20MacBook%20Air%2C%2030W%2F35W%20dual-port%2F70w%20power%20adapter%2C%20USB-C-to-MagSafe%20cable%2C%202%20Apple%20stickers%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh4%2C599%3C%2Fp%3E%0A
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%20Twin%20electric%20motors%20and%20105kWh%20battery%20pack%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E619hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E1%2C015Nm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESingle-speed%20auto%0D%3Cbr%3E%3Cstrong%3ETouring%20range%3A%20%3C%2Fstrong%3EUp%20to%20561km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3EQ3%20or%20Q4%202022%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh635%2C000%3C%2Fp%3E%0A
The specs

Engine: 3.0-litre 6-cyl turbo

Power: 435hp at 5,900rpm

Torque: 520Nm at 1,800-5,500rpm

Transmission: 9-speed auto

Price: from Dh498,542

On sale: now

Tearful appearance

Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday. 

Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow. 

She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.

A spokesman said her upset demeanour was due to a personal matter.

Blackpink World Tour [Born Pink] In Cinemas

Starring: Rose, Jisoo, Jennie, Lisa

Directors: Min Geun, Oh Yoon-Dong

Rating: 3/5

Specs

Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request

Tips for used car buyers
  • Choose cars with GCC specifications
  • Get a service history for cars less than five years old
  • Don’t go cheap on the inspection
  • Check for oil leaks
  • Do a Google search on the standard problems for your car model
  • Do your due diligence. Get a transfer of ownership done at an official RTA centre
  • Check the vehicle’s condition. You don’t want to buy a car that’s a good deal but ends up costing you Dh10,000 in repairs every month
  • Validate warranty and service contracts with the relevant agency and and make sure they are valid when ownership is transferred
  • If you are planning to sell the car soon, buy one with a good resale value. The two most popular cars in the UAE are black or white in colour and other colours are harder to sell

Tarek Kabrit, chief executive of Seez, and Imad Hammad, chief executive and co-founder of CarSwitch.com

F1 The Movie

Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem

Director: Joseph Kosinski

Rating: 4/5

The years Ramadan fell in May

1987

1954

1921

1888

Global Fungi Facts

• Scientists estimate there could be as many as 3 million fungal species globally
• Only about 160,000 have been officially described leaving around 90% undiscovered
• Fungi account for roughly 90% of Earth's unknown biodiversity
• Forest fungi help tackle climate change, absorbing up to 36% of global fossil fuel emissions annually and storing around 5 billion tonnes of carbon in the planet's topsoil

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

Read part one: how cars came to the UAE

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part one: how cars came to the UAE

 

All%20The%20Light%20We%20Cannot%20See%20
%3Cp%3E%3Cstrong%3ECreator%3A%20%3C%2Fstrong%3ESteven%20Knight%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%C2%A0%3C%2Fstrong%3EMark%20Ruffalo%2C%20Hugh%20Laurie%2C%20Aria%20Mia%20Loberti%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%20%3C%2Fstrong%3E1%2F5%C2%A0%3C%2Fp%3E%0A
Specs

Engine: 51.5kW electric motor

Range: 400km

Power: 134bhp

Torque: 175Nm

Price: From Dh98,800

Available: Now

Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
BMW M5 specs

Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor

Power: 727hp

Torque: 1,000Nm

Transmission: 8-speed auto

Fuel consumption: 10.6L/100km

On sale: Now

Price: From Dh650,000

Normal People

Sally Rooney, Faber & Faber
 

ARSENAL IN 1977

Feb 05 Arsenal 0-0 Sunderland

Feb 12 Manchester City 1-0 Arsenal

Feb 15 Middlesbrough 3-0 Arsenal

Feb 19 Arsenal 2-3 West Ham

Feb 26 Middlesbrough 4-1 Arsenal (FA Cup)

Mar 01 Everton 2-1 Arsenal

Mar 05  Arsenal 1-4 ipswich

March 08 Arsenal 1-2 West Brom

Mar 12 QPR 2-1 Arsenal

Mar 23 Stoke 1-1 Arsenal

Apr 02  Arsenal 3-0 Leicester

 

 

Benefits of first-time home buyers' scheme
  • Priority access to new homes from participating developers
  • Discounts on sales price of off-plan units
  • Flexible payment plans from developers
  • Mortgages with better interest rates, faster approval times and reduced fees
  • DLD registration fee can be paid through banks or credit cards at zero interest rates
The%20team
%3Cp%3E%0DFashion%20director%3A%20Sarah%20Maisey%0D%3Cbr%3EPhotographer%3A%20Greg%20Adamski%0D%3Cbr%3EHair%20and%20make-up%3A%20Ania%20Poniatowska%0D%3Cbr%3EModels%3A%20Nyajouk%20and%20Kristine%20at%20MMG%2C%20and%20Mitchell%0D%3Cbr%3EStylist%E2%80%99s%20assistants%3A%20Nihala%20Naval%20and%20Sneha%20Maria%20Siby%0D%3Cbr%3EVideographer%3A%20Nilanjana%20Gupta%3C%2Fp%3E%0A
Leaderboard

63 - Mike Lorenzo-Vera (FRA)

64 - Rory McIlroy (NIR)

66 - Jon Rahm (ESP)

67 - Tom Lewis (ENG), Tommy Fleetwood (ENG)

68 - Rafael Cabrera-Bello (ESP), Marcus Kinhult (SWE)

69 - Justin Rose (ENG), Thomas Detry (BEL), Francesco Molinari (ITA), Danny Willett (ENG), Li Haotong (CHN), Matthias Schwab (AUT)

Company%C2%A0profile
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3EHayvn%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2018%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EChristopher%20Flinos%2C%20Ahmed%20Ismail%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EAbu%20Dhabi%2C%20UAE%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3Efinancial%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%20%3C%2Fstrong%3Eundisclosed%3Cbr%3E%3Cstrong%3ESize%3A%3C%2Fstrong%3E%2044%20employees%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3Eseries%20B%20in%20the%20second%20half%20of%202023%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EHilbert%20Capital%2C%20Red%20Acre%20Ventures%3C%2Fp%3E%0A
GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

Results

United States beat UAE by three wickets

United States beat Scotland by 35 runs

UAE v Scotland – no result

United States beat UAE by 98 runs

Scotland beat United States by four wickets

Fixtures

Sunday, 10am, ICC Academy, Dubai - UAE v Scotland

Admission is free

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

Updated: January 02, 2022, 4:30 AM`