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Indian economy, lockdown and the way forward

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Indian economy, lockdown and the way forward

For every person, the year 2020 started on a great note. The resolutions were set and with them plans for the year. But everything came to a standstill when the world was hit by a pandemic. A pandemic so severe that every nation started working on their plan of action to fight it. Countries presently are struggling to keep the cases low and the economy afloat. There are numerous concerns and a sense of fear among the people who are unable to understand what life will be like once this pandemic subsides.

Though the economy is going through a tough phase, it is important to consider the fact that COVID-19 is preparing us for the future. With theories suggesting that by 2030 most of the jobs will be taken over by AI and robots, COVID-19 has already given us an opportunity to become a part of a technologically advanced world. Companies and educational institutions have moved to a virtual way of working and this is a heads up for us to be ready for disruptions across markets.

But presently, economies all across the globe are facing a slump. This makes it important for us to understand the impact of COVID on the Indian and world economy, specifically GDP.

GDP trends across the world

This is not the first time that the GDP has been this low for some really strong economies of the world. In the past, they have faced such situations and were able to move past it and show strong numbers. Let’s get an overview of what the experts had to say the last time when these economies faced a fall.

United State of America: It was in the second quarter of the year 2019 when the US economy showed a low per capita GDP. At the time the experts stated that the expansion was made possible only by big spending by the customers and the government, offsetting an unexpected slump in the business investment.

United Kingdom: UK showed a low per capita GDP in the fourth quarter of 2018. The experts stated that UK growth slumped in the first quarter of 2018 due to brexit which affected the consumers and the firm.

Switzerland: In the fourth quarter of 2018, GDP was this low in Singapore. The major statement by experts was that due to a rise in wages, domestic demand has become weak while company investments have also become subdued.

Germany: For Germany too, it was the fourth quarter of 2018 which showed a major slump. At that time it was said that the quarter rounded out a year in which overall growth was weakest since 2013.

Canada: The second quarter of 2018 turned out to be a little tough for Canada. It was stated by experts that an increase in exports of energy, pharma, and aircraft products has played a major role in propelling the economy of Canada higher in the second quarter of the year.

GDP trend in India

GDP refers to the money value of all the final goods and services produced within the domestic territory of a country in a year. For India, GDP growth has been a major indicator of economic performance. Over the years, the country has seen some really promising figures. In the year 2000, the GDP growth was 3.84%. From there we reached a mark of 8.5% GDP growth by the year 2010. But in the year 2019, there was a slight drop, and India reported a GDP growth of 5.02%. In the current year, due to the pandemic, the figures are expected to slump further and even become negative. A 6.1% contraction in the Indian GDP is expected in the current year due to weakened economic activity.

The demand and supply both have suffered due to the pandemic. Due to the uncertainty factor, there is a rise in the savings by the people to meet unforeseen circumstances. The country is in a tight spot and to overcome that RBI has already introduced rate cuts by a cumulative 1.15 percent since the very start of the pandemic.

Though these are tough times for the nation, it is expected that India will emerge victoriously. Here are some other related articles that you will find insightful: