India will be Worst Affected among Major Economies after Covid-19 Crisis

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economy covid
economy covid

Oxford Economics report finds that India would be the worst-affected among the world’s major economies even after the waves of Covid-19 disappears.

The balance sheet states that had been building before the coronavirus outbreak will probably worsen, Priyanka Kishore, head of economics for South Asia and South-East Asia, wrote in the report. She projects potential growth for India at 4.5% over the next five years, lower than 6.5% before the virus.

“It’s likely that headwinds already hampering growth prior to 2020 — such as stressed corporate balance sheets, elevated non-performing assets of banks, the fallout in non-bank financial companies, and labor market weakness – will worsen,” she said. “The resulting long-term scars, probably among the worst globally, would push India’s trend growth substantially lower from pre-Covid levels.”

The International Monetary Fund predicts GDP will shrink 10.3% in the year to March 2021 as Modi’s sudden lockdown paralyzed activity. While a sharp rebound is a forecast as economic activity resumes, there are lingering scars.

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