The caronavirus is slowly spreading to the rest of the world which was largely concentrated in China, and is expected to have adverse economic consequences. If China's economy slows to 1.2 per cent in January-March quarter, the GDP shock to India from the demand side could be about 0.4- 0.5 per cent, the report said. But the rest of the world slows if China slows, particularly many South Asian and European economies.
" The Indian economy is relatively insulated "said Tom, Orlik, chief economist at Bloomberg Economics." It is not majorly integrated into the global supply chains and not a major exporter to the global markets.
Indian businesses could benefit from a fall in crude prices by way of lower fuel and input costs. Besides, the cost of overseas borrowing would also decline as the yields on US Treasury bonds fall, according to Orlik.
Central banks globally are expected to ease policy in anitcipation of a slowdown in the global economy. The US Fed has already announced a 50 bps reduction of its key policy rates.
The report looks at four different scenarios, assuming a limited impact on China in the first quarter, another one assumes the impact to continue in second quarter, another assuming crisis in high risk country and the fourth assuming all countries face a disruptive outbreak and that this prompts a GDP drop in all economies matching China’s experience in the first quarter of 2020. Global growth grinds to a halt for 2020 as a whole -- a cost of $2.7 trillion in lost output even if the pandemic passes and the level of world GDP recovers by the fourth quarter.
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March 04, 2020 at 01:22PM
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Coronavirus fall to have minimal impact on India's GDP: Report - Economic Times
"to have an impact" - Google News
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