COVID-hit economy may take six months to recover
Unprecedented measures taken to prevent the spread of coronavirus are likely to severely impact the economy that was already experiencing a slowdown.
BENGALURU: Unprecedented measures taken to prevent the spread of coronavirus are likely to severely impact the economy that was already experiencing a slowdown. It may require nearly six months to fully recover from this impact.
“We were already on the downturn and the GDP growth rate, which is 4.8 per cent, may slump-down to 4 per cent. Maybe even less,” said Prof R S Deshpande, visiting professor and former chairman, Institute of Social and Economic Change (ISEC). According to him, the lockdown will have a major economic impact, hitting the unorganised sector the worst as a large number of people will migrate back to villages. “They will not have any source of income,” he added.
While central and state governments are battling to blunt the impact of the outbreak, most sectors, including agriculture and food processing, real estate, aviation, tourism, hospitality, retail, textiles, transport and logistics are likely to be hit. According to a survey by the Federation of Indian Chamber of Commerce and Industry (FICCI ), which was released on Friday, a significant 53 per cent of businesses indicate the marked impact of the pandemic on operations even at the early stages.
“All businesses will be impacted, some will be hit more and some less. It may take around six months to recover,” said D Muralidhar, chairman of research wing and past president of FKCCI. In Karnataka, economic activities will be hit by 15 to 20 pert cent, he added.
If the slowdown due to the health emergency continues for a long time, it may impact jobs and order books may not be replenished and companies may find it difficult to manage. Taxi drivers, auto drivers, those working in the hospitality industry and unorganised sectors are already feeling the heat. “If it continues for long, even the organised sector may find it difficult to hold on to their employees,” Muralidhar added.