Netanyahu fails to form Israel govt
Israel’s opposition leader Yair Lapid received a mandate to form a government Wednesday, after Prime Minister Benjamin Netanyahu’s failed effort following the nation’s fourth inconclusive vote in less than two years. President Reuven Rivlin made the announcement after consultations with party leaders to determine if any lawmaker had a path to clinch a coalition and end an unprecedented era of political gridlock. “I will do everything to ensure that an Israeli unity government will be formed as soon as possible so we can get to work for the people of Israel,” Lapid said in a statement after the announcement. Netanyahu’s 28-day mandate to put together a coalition ran out at midnight after he failed to agree terms with potential right-wing partners, opening the way for President Reuven Rivlin to assign the task to another member of parliament.
The second wave may shave one percentage point from India’s initial economic growth forecast for 2021-22, according to a finance ministry assessment that assumes that the disease will peak in May.
“We don’t think the economic impact will be as serious as last year. The localised curbs will last at best for a month or two months. This may lead to around 1 percentage point loss of GDP compared to starting estimates,” a senior finance ministry official said on condition of anonymity.
While the Economic Survey has assumed 11% GDP growth in 2021-22, the budget presented by finance minister Nirmala Sitharaman in February has factored in 10.5% GDP growth. The finance ministry’s fresh estimate seems to indicate growth may remain within 9.5-10% range.
Escalating Covid cases have overwhelmed India’s health system, forcing many states to announce lockdowns and night curfews which are expected to delay a strong recovery in domestic economic activity.
Rating agency Standard and Poor’s cautioned on Wednesday that India’s second wave could knock off 1.2-2.8 percentage points from its 11% GDP growth estimate for 2021-22, derailing what has been a promising recovery in the economy, profits, and credit metrics.
“In our moderate scenario, retail and recreational mobility should remain stuck at about 70% of normal levels until May 2021, before gradually normalising by September. In our severe scenario, mobility is 50-60% of normal levels in May, recovers thereafter, but only normalises by December. This means people are staying home more and spending less. Our moderate scenario suggests a hit to GDP of about 1.2 percentage points. This means full-year growth of 9.8% for fiscal 2022. In the severe scenario, the hit is 2.8 percentage points, with growth of 8.2%,” the rating agency said.
S&P said the Centre avoided another nationwide lockdown, given this would be unpopular and economically costly. “Much more extensive restrictions would prolong the pain of badly hit sectors, such as retail and tourism. Halts to domestic air traffic and subdued international travel may dismantle a fragile recovery underway for airports. A drawn-out covid wave would hit small and midsize enterprises particularly hard and delay recovery in banks’ asset quality,” it added.
Fitch Ratings separately said on Wednesday downside pressures on India’s creditworthiness remain prominent, highlighted by the negative outlook on the sovereign’s ‘BBB-’ rating, which Fitch Ratings affirmed on April 22.