Categories: Business

Rapidly increasing number of Covid-19 patients increases risk to economy, anticipating deep recession in the country

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Escalating new COVID-19 cases pose further downside risk to economy, says IHS Markit

new Delhi. While the Indian economy is expected to slow down in the current financial year due to the long-continued lockdown in the country, the increasing number of Kovid-19 patients after the lockdown has been showing the country's economic outlook and the risk of decline. IHS Markets said on Friday that the impact of this long lockdown is profound on both the country's industrial production and consumer expenditure.

The IHS market said that the second quarter of 2020 is expected to witness a sharp decline in the gross domestic product (GDP) growth rate in April-June, causing the country's economic growth rate to suffer from a deep recession in FY 2020-21. The company stated this in its assessment of the impact of Kovid-19 on the Asia-Pacific region. The lockdown continues from March 25 in India which will last till June 30. However, the lockdown rules have been relaxed since May 4.

IHH Markit said that Kovid-19 cases saw a decrease after granting relief to lockdown rules compared to other countries. But the situation in India is the opposite. In such a situation, the future of lockdown rules is very uncertain and the risk of the economy going down further increases. The survey company said that the increase in corona cases in India is due to high population density in cities, high population of the country and weak health system.

IHS Market's April survey among procurement managers of companies shows the full impact of the PMI lockdown, with signs of business activity almost collapsing. The company's integrated production index stood at 7.2 points in April, the lowest level in the four-and-a-half-year history since the survey began. The survey shows that Kovid-19 has badly affected both manufacturing and services sector of the country. This has led to a sharp decline in overall business activity.

This post was published on June 12, 2020 2:23 pm

Content Team

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