In the thick of Coronavirus, IMF Indian Mission Chief Ranil Salgado in an exclusive interview opined on the implications of Coronavirus on the global economy as well as the Indian economy. Speaking about the recession that might take place as a result of the pandemic, Salgado stated that there will be a retraction of growth rate by 3%/.
According to various estimates, extension of the nationwide lockdown till May 3 will inflict an economic loss of USD 234.4 billion, and result in stagnant GDP for the calendar year 2020. The economic growth will be zero for the calendar year 2020 and when seen from a fiscal year perspective, will rise by 0.8 per cent in 2021. Furthermore, highlighting the impact of the pandemic on the Indian economy, he stated that there will be a significant downgrade of 1.9% on the economy. However, he hailed the Indian government for its containment measures, hinting at the early lockdown imposed by India.
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He further mentioned the impact of the global recession on the Indian economy and stated that Indian reduction in global trade will result in a reduction of Indian export.
"We expect a 1.9% downgrade which is significantly below what India would expect. However, the government began containment measures. The imposing lockdown was a good measure," said Mr Salgado
"To some extent, India does trade globally. So the reduction in global growth will result in a reduction in Indian export to other countries. There will be an impact directly through tourism because of the flight suspension," he added.
Futhermore, the IMF Indian mission chief suggested some measures to stabilise its economy. He added that this could be an opportunity for India to increase manufacturing.
"This could be an opportunity for India to increase its manufacturing. We would advise that India needs to improve its backward linkages. So it needs to be a part of a global chain. Secondly, India can improve infrastructure as well as improve business climate, that will help both Indian and foreign investors," said the IMF chief.