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The global growth forecast for 2020 has been lowered 2.2 per cent from 2.3 per cent by the Economist Intelligence Unit, which poses new risks which has emerged due to the coronavirus outbreak across the world. The global growth rate throughout 2019 was sluggish due to the trade tensions that prevailed which posed a sharp deceleration in the real GDP growth in India, the US and China and also political uncertainty across a number of EU countries.
The Asian Development Bank said that the cost of coronavirus pandemic could be as great as $4.1 trillion or approximately 5% of the global gross domestic product, depending on the transmission of the infection across the US, Europe as well as other major economies.
The Manila-based lender said in its report on Asian Development Outlook that a shorter containment period could restrict the damage to $2 trillion or 2.3% of the world output. It was also reported that developing Asia, including China accounts for about 22% to 36% of the total cost of the pandemic. Yasuyuki Sawada, ADB’s chief economist, said in the report that “No one can say how widely the Covid-19 pandemic may spread, and containment may take longer than currently projected.” He also added that “The possibility of severe financial turmoil and financial crises cannot be discounted.”
ADB reported that inflation is likely to accelerate the prices of food, even as the economy is weak and softer prices of commodities may mitigate any surge in price. As per the reports, all the developing subregions of Asia will witness a very slow growth in this period of 2020.
CRISIL has cut down the FY21 growth forecast of India to 3.5%. Earlier it was projected by CRISIL that 5.2% economic growth would be witnessed in India for the next financial year.