Based on the select countries peak data and recovery rate, SBI economists believe that India can technically reach its coronavirus peak when its recovery rate will cross 75% mark, the average benchmark across countries. But the economists also serve a note of caution.
In a report they say, “the data also shows that there is no causation between recovery rate and peak rate, as Brazil reached its peak rate at a recovery rate of 69%. However, that will not be the end of the story. In US, the peak has come twice.”
The current coronavirus recovery rate in India is 72.51%. According to the latest figures, the covid tally in India has risen to 26.47 lakh, including 6.76 lakh active cases. On the other hand, 19.19 lakh have been discharged while death toll has gone up to 50,921 deaths.
When states will reach the coronavirus peak?
“In some states it is expected that the peak has already been passed (like Delhi, Tamil Nadu, etc.) while in other states (like Maharashtra, West Bengal etc.) it is yet to arrive,” the report said.
“An analysis of positivity rate and test per million indicates that in the states like Maharashtra, Telangana, Bihar and West Bengal the positivity rate is significantly high but tests per million are quite less. This indicates that in these states the peak has not yet come and the situation will remain grave till the time number of tests increase significantly. Our analysis suggests that at least 22 states, of 27 states we have analysed, are yet to witness a peak. The states that seems to have crossed the peak are: Tamil Nadu, Delhi, Gujarat and J&K and Tripura.”
Despite the surge in covid cases in India, SBI economists revisited their GDP growth estimation for Q1 FY21. They now expect GDP to contract 16.5% as compared to earlier contraction of 20%
“Specifically, degrowth in corporate GVA is significantly better than revenue degrowth in Q1FY21 as far as the results of the listed companies are concerned. In principle, revenue decline of listed companies has been far outstripped by cost rationalization thereby not impacting margins.”
SBI economists also say that “rural recovery is unlikely to support such pace in subsequent quarters as overall, the per capita monthly expenditure in urban areas is at least 1.8 times of rural areas and rural wage growth in real terms might still be negative. This indicates that rural recovery will not have much impact on GDP growth. Thus, it is of utmost importance to unveil further steps to support growth”.