Omicron Variant Has The Potential To Pull Back Smart Recovery: India ratings

Omicron variant has the potential to pull back the smart recovery witnessed, since the decline of the deadly second wave, India Ratings has said.

"Several countries in Europe have reinstated restrictions. There is a growing need felt to bring back the restrictions in India. The intensity and severity of the spread of Omicron is being keenly monitored to determine the extent of demand destruction in the domestic market and recovery-supporting export market," the ratings agency has said.

Meanwhile, the ratings agency has said that corporate rating upgrades continued to outpace downgrades for 11 straight months till November 2021. During the month, Ind-Ra upgraded 27 ratings (October 2021: 22) while downgrading four others (11). The positive outlook for corporate credit has been supported by a sustained increase in business activity along with continued deleveraging. Of the total number of reviewed ratings during November 2021, nearly 60% did not see any rating actions. Overall, the number of positive rating actions was 37 (October 2021: 33) and that of negative rating actions was five (16).

"Positive rating actions can be seen across majority sectors, indicating a broader economic recovery. Several high frequency indicators have returned to pre-pandemic levels. The factors such as GST collections in November 2021 being at the second-highest level, demand recovery, and continued robust export volume growth indicate an economic revival, backed by a favourable global trade outlook and government focus on infrastructure spending," the ratings agency has said.