COVID-19 has ravaged India’s economy in 2020, and GDP is all but certain to have suffered its largest slump on record this year. But there are reasons for optimism as the year draws to a close. Several activity indicators point to a continued recovery in Q4 from the depths of the lockdown. Our in-house mobility tracker has picked up steadily throughout this quarter, and is now around 20% below the pre-virus level. What’s more, new virus cases have dropped sharply from their September peak and are now at their lowest level in six months. And there is growing hope that a vaccination program in India could begin as early as January. All of this underpins our forecasts for GDP growth to rebound by 12% in 2021, stronger than the latest consensus expectation of growth of 9.7%.
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