Daily Covid cases could hit 3 million if India goes US way: Nomura

India's daily Covid-19 cases could hit as high as three million a day if the Omicron-driven third wave follows the same trajectory as that in the United States, financial services firm Nomura said in a note on Friday, warning that the healthcare system could be overwhelmed. The caseload could be smaller at 740,000 a day if the per million infection are similar to South Africa, it said.

Nomura cautioned that the third wave will not only lower growth, but also raise inflation, which will push the Reserve Bank of India (RBI) into policy normalisation (repo rate hikes) from April onwards.

The firm sees growing macro risks for India going forward.


On Thursday, India's daily case count had crossed 100,000 after a gap of 214 days, taking the total tally of Covid-19 cases so far to 35.2 million, which include 3,007 cases of Omicron, according to the health ministry data updated on Friday.

Nomura said in some countries in emerging Asia such as India, the Philippines and Indonesia, where the fully vaccinated share of the total population was only around 45%, healthcare systems could be overwhelmed owing to the sheer number at risk of being infected with the Omicron variant.

"The emergence of the Omicron variant has increased uncertainty, but we see Asia's bumpy upcycle extending into H1 2022, supported by easing supply bottlenecks," Nomura said.

It expects an export downturn to begin from mid-2022, reflecting lagged spill-over effects from a slowing China, normalisation of US goods demand, a moderation in the tech cycle, and 'bullwhip' effects when small shifts in customer demand lead to increasing fluctuations along the supply chain due to distorted or exaggerated responses.