Positive Side of COVID Impact on Economy: Especially for India
1) There is gloom everywhere. Every morning I open the newspaper, I see that there has been a record number of new Coronavirus cases in the country. Every day surpasses the previous day in the numbers tally. Economists are predicting the worst recession of the century hitting the globe where millions of jobs will be lost and many more millions of people will be driven into poverty. So, is everything lost? Is there no hope for the economy moving forward? To investigate this issue, I started to look around and realized that in the midst of all this gloom, there are many silver linings. Many reasons to feel optimistic and cheer about; especially if you are an Indian. So, what are the positives that might emerge as the COVID pandemic begins to taper down and eventually leave us alone? There are several such positives. Let us take a look at them:
a) GDP Growth Rates: IMF is the global nodal agency that monitors all the economies of the world and undertakes fiscal interventions wherever these are required to bail out sinking economies. Economies are considered to be in recession whenever they show negative growth rates as compared to the previous two quarters. Almost all the major economies of the world shall get into major recessions after the COVID pandemic. IMF recently published the expected recessionary trends across major global economies. This table is as shown below:
b) The above table is an interesting one. Kindly note that, while all the major developed economies of the world shall shrink and show recessionary negative growth rate (USA -5.9, Spain -8.0, Italy -9.1 etc), only two major economies of the developing world shall continue to tread in positive territories. India & China. When there is economic gloom across the entire globe, the Indian economy is expected to expand by around 2% in 2020 as well. Recent announcements by the Niti Ayog show that the Agricultural output of the country is likely to show a 3% increase and this is likely to positively impact the GDP numbers for India further. So, what is the reason for the Indian economy to show this resilience when the rest of the world is crumbling around us?