(Bloomberg) -- India's economy is likely to see an improvement from next quarter when demand returns along with an accelerated pace of vaccination, according to UBS Securities.
“India should again see pent-up demand,” Tanvee Gupta Jain, chief India economist at UBS Securities in Mumbai, said in an interview to Bloomberg TV. “There is precautionary savings which are being built up by the households and will only unwind once they are sure that the health concerns are eased because of the vaccination being available.”
Government data Monday showed Asia's third-largest economy had started to gain momentum in the January-March quarter before a second wave of coronavirus infections forced some parts of the country into renewed lockdowns. The virus crisis, which overwhelmed India's health infrastructure, has prompted economists to scale back growth estimates.
Read: India's Economy Showed Momentum Before Virus Crisis Hit Home
Gupta's forecast is for the economy to grow 8.9% in fiscal year that began April 1. That compares with a 12.5% expansion seen by the International Monetary Fund in its April outlook.
“The second-half of this year should see a much stronger recovery,” Jain said. “High-contact services consumption, stronger global growth and easy financing conditions are likely to support India's growth recovery,” she said.
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