Coronavirus to impact India's economic growth "severely": D&B
Coronavirus will impact India's economic growth "severely", as the COVID-19 lockdown is causing significant disruption across multiple sectors, including manufacturing, oil and finance, among others, says a report.
According to Dun & Bradstreet's latest Economy Forecast, the probability of countries entering recession and companies going bankrupt has increased and India is not likely to "remain decoupled" from the global meltdown.
"As lockdowns are imposed in other global manufacturing hubs, besides China, the extent of impairment to global supply chain and global growth is likely to increase," said Arun Singh, Chief Economist Dun & Bradstreet India.
On India's economic growth, Singh said, "given the 21-day lockdown in India, India's GDP growth is expected to moderate further from our earlier estimate of 5 percent for FY20. And growth for FY21 remained highly uncertain."
As per the report, lockdowns and restrictions on commercial activities and people gatherings are likely to strongly impact global and domestic growth from March 2020 onwards.
Dun & Bradstreet expects the Index of Industrial Production (IIP) to remain subdued by 4-4.5 percent during February 2020.
Singh further said accurate quantitative estimation of economic growth will vary and has a high probability of being revised as the severity and prevalence of the outbreak remains uncertain.
On the price scenario, slowdown in demand and production activities, a sharp fall in the global price of crude oil, and price decreases in other major commodities such as energy, base metals and fertilizers among others, are expected to exert downward pressure on inflation.
D&B expects the CPI inflation to remain in the range of 6.5-6.7 percent and WPI inflation in the range of 2.35-2.5 percent during March 2020.
In order to deal with the unprecedented situation, many countries have rushed to announce fiscal and monetary stimulus measures to recover some ground and "India is likely to follow soon", Singh said.
Experts believe the Reserve Bank of India (RBI) may go for a rate cut before the next scheduled policy review on April 3.
(Edited by Kanishk Singh)