However, despite their localised nature, the increase in cases is enough to indicate a possible jump in the national pandemic curve, the firm said in a report titled, ‘Second wave or just a splash?’, released on Wednesday.
While it was too early to gauge whether this was the start of a second wave, “On balance, we continue to view this as a series of relatively localised outbreaks for now, but with possible national ramifications if it spreads rapidly,” Nomura economists Sonal Varma and Aurodeep Nandi said in the report.
The resurgence in cases could trigger renewed risk aversion in the form of reimposition of lockdown restrictions by authorities while individuals may choose to dial back on mobility levels.
Any restrictions imposed are likely to be local in nature and may disrupt India’s near-term normalisation equilibrium, the report said, raising concerns of an already lowered workplace mobility in some of the most affected states.
The Maharashtra state government has declared a lockdown in some of the worst-affected districts like Amravati and Vidarbha till March 1, while Karnataka has enacted certain border restrictions on roads connecting Kerala, which has a higher case load.
Meanwhile, Delhi authorities have said travellers from the five states of Maharashtra, Kerala, Madhya Pradesh, Chhattisgarh and Punjab will not be allowed entry without a negative Covid-19 test report.
“However, this would not change our medium-term outlook, as resurgences in other countries have proven less economically disruptive than originally feared,” Nomura said.
Tailwinds for growth remain intact from the lagged impact of easy financial conditions, fiscal activism, strong global growth, and the ‘vaccine pivot, it said.
Nomura maintained its projection of 13.5% gross domestic product growth in FY22 following the expected 6.7% contraction in the ongoing fiscal.