November 2020

Mohammad Anas Wahaj | 27 nov 2020

According to the latest report by Oxford Economics, India will be worst-affected among the world's major economies even after the pandemic lessens, with output 12% below pre-virus levels through the middle of the decade. Priyanka Kishore, head of economics for South Asia and South-East Asia at Oxford Economics, says, '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.' Ms. Kishore projects potential growth for India at 4.5% over the next five years, lower than 6.5% before the virus. A recently published paper by Reserve Bank of India predicted Asia's third-largest economy has entered a historic technical recession. The International Monetary Fund predicts GDP will shrink 10.3% in the year to March 2021. Ms. Kishore further adds, 'All supply-side factors feel the effect, with only human capital's contribution unchanged from the pre-virus baseline. Capital accumulation takes the biggest hit because we expect balance-sheet stresses to worsen following the crisis, lengthening the investment recovery cycle.' Read on...

ThePrint: Indian economy will struggle even after Covid, grow at 4.5% until 2025 - Oxford Economics
Author: Anirban Nag

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