The outbreak of coronavirus has altered the outlook of India’s economic recovery significantly, said the Reserve Bank of India in its Monetary Policy Report, highlighting the pandemic’s intensifying impact on South Asia’s engine of growth.
“Prior to the outbreak of Covid-19, the outlook for growth for 2020-21 was looking up,” the Reserve Bank of India said.
“The Covid-19 pandemic has drastically altered this outlook. The global economy is expected to slump into recession in 2020, as post-Covid projections indicate.”
India’s economy has reported its slowest pace in more than six years in the last three months of 2019 and was predicted to hit a full-year growth of 5 percent which would be the lowest in over ten years.
Any benefit pertaining to trade from a prolonged downturn in the price of international crude is also unlikely to counterbalance the economic haul from the coronavirus-induced lockdown of the country and loss of external demand, said RBI.