COVID-19 – Virus for Global Economy
COVID-19 (coronavirus disease 2019) is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), previously known as 2019 novel coronavirus (2019-nCoV), a strain of coronavirus. The first cases were seen in Wuhan, China in December 2019 before spreading globally. The current outbreak was recognized as a pandemic on 11 March 2020. No effective treatment or vaccine exists currently (March 2020).
The World Health Organization (WHO) originally called this illness “novel coronavirus-infected pneumonia (NCIP)” and the virus itself had been named “2019 novel coronavirus (2019-nCoV).
Total positive cases 614,224 and deaths 28,240 from the Corona virus in the World businesses are coping with lost revenue and disrupted supply chains as factory shutdowns and quarantine measures spread across the globe, restricting movement and business activity.
Big shifts in stock markets, where shares in companies are bought and sold, can affect many investments in pensions or individual savings accounts (ISAs).
The FTSE, Dow Jones Industrial Average and the Nikkei have all seen huge falls since the outbreak began on 31 December.
The Dow and the FTSE recently saw their biggest one day declines since 1987.
“We have reassessed the prospects for growth for 2020 and 2021. It is now clear that we have entered a recession as bad or worse than in 2009. We do project recovery in 2021,” IMF Managing Director Kristalina Georgieva told reporters at a news conference.
Effects on Indian Economy-
- A total lockdown for a month would take out 8.5% of GDP
- China & Italy have shown lockdowns persist longer than expected
- Public fear would remain even beyond lockdown, slowing recovery.
- Even before the outbreak, RBI estimated NPAs to touch 10.5% of assets
- 28% of bank assets are retail loans, which have become risky
- Already stressed corporate sector loans expected to worsen.
- 5% FY21 fiscal deficit target was overestimation even before the outbreak
- Growth slowdown and lower tax revenue were likey to push it to 4%
Stimulus package will inflate the fiscal deficit to 4.7%.
