COVID-19 Toll On Indian Economy Deepens, Job Crisis To Worsen: Poll
Sumaira FH Published June 16, 2021 | 02:50 PM
ISLAMABAD, (UrduPoint / Pakistan Point News - 16th Jun, 2021 ) :India's economic outlook has weakened again, with worst-case scenario forecasts suggesting the toll from the coronavirus pandemic could be much deeper, stoking fears the job crisis may worsen over the coming year.
Renewed restrictions to curb the current coronavirus wave have stalled economic activity, leaving many millions out of work and pushing economists - who have broadly been bullish - to downgrade their views for the second time since early April, a Reuters poll found.
The May 20-27 poll showed the outlook for the current quarter was lowered to 21.6% annually, and to 9.8% on average for this fiscal year, down from 23.0% and 10.4% respectively a month ago. All 29 economists, in response to an additional question, warned the outlook was either "weak and prone to further downgrades" or "fragile, with a limited downside".
None expected a "strong recovery, followed by an upgrade".
"Therefore new surges of the virus hang above recovery like the sword of Damocles. Until a large share of the population is vaccinated there remains this downside risk of new waves and subsequent lockdowns hampering the recovery," said Wouter van Eijkelenburg, an economist at Rabobank.
Underscoring concerns that a slow vaccine rollout may make a bigger dent in the economy, the consensus showed in a worst-case scenario the economy would average just 6.8% growth this fiscal year after its deepest ever recession last year.
"The threat of further waves will hang over the economic outlook so long as India's vaccination progress remains lackluster," said Gareth Leather, senior Asia economist at Capital Economics.
India's unemployment rate soared to a near one-year-high of 14.73% in the week ending May 23, according to the Center for Monitoring Indian Economy (CMIE), reflecting the impact of the economic slowdown.
When asked if there was a risk that India's unemployment situation could worsen over the coming year, more than 85%, or 25 of 29 respondents, said it was high, including four who said very high.
"There is going to be a significant demand shock to the economy, some of that could be permanent demand destruction, thereby pushing more out of the jobs market and keeping the unemployment rate elevated over the coming year," said Prakash Sakpal, senior Asia economist at ING.
While calls have increased for more fiscal stimulus to speed up the economic healing, the government has limited space to respond to challenges posed by the health crisis.
"India's policymakers find themselves between a rock and a hard place when it comes to decisions on additional fiscal stimulus," said Rabobank's Eijkelenburg.
According to experts, the Indian economy started slumping when Modi imposed lockdown (2020) across the country without preparations to cope with the repercussions.
Tens of thousands of migrants were seen in wilderness trudging along the highways to reach back their homes as the second wave of COVID-19 this year played havoc with India's economy.
The country's national economy declined to 7.3 per cent in 2020-21, a worst recession since independence as coronavirus lockdowns put millions out of work, according to the estimates of Centre for Monitoring the Indian Economy.
Around 230 million Indians slipped into poverty trap due to the pandemic last year as study by Bangalore's Azim Premji University reveals.
In the wake of second wave, around 7.3 million people lost their jobs in April alone (23 crore people earn less than 375 Indian rupees per day that makes $5 a day).� The second wave killed over 160,000 people in eight weeks, prompting further lockdowns.
Over 90 per cent of the workforce in India is engaged in the informal sector having no social safety net. Also, millions, for one or other reason, do not qualify for emergency government ratings.
Esther Duflo and Abhijit Banerjee (both Nobel Laureate economists) have expressed serious concerns over falling graph of India's economy and suggested that government should focus on loans to hard-hit businesses rather than direct cash handouts to susceptible households.
Barclays, British financial services firm in a recently released report pegged the economic const of India's second wave at $74 billion, or 2.4 percent of GDP.
The experts have a reason to say that the second wave, which dug deep into India's ill-equipped villages, could spark a fresh crisis among an impoverished population already reeling from last year's shutdown.
Pew Research Centre report said; "The coronavirus pandemic may have shrunk India's middle-class population by 32 million and driven 75 million below the poverty line in 2020".
Related Topics
Recent Stories
Saudi Assistant Minister of Defence calls on army chief
Currency Rate In Pakistan - Dollar, Euro, Pound, Riyal Rates On 19 April 2024
Today Gold Rate in Pakistan 19 April 2024
Rock-solid Ruud racks up season-leading win in Barcelona
At UN, Iran says it will make Israel 'regret' reprisals
G7 hears calls for 'critical' Ukraine aid
EU seeks to leverage might to confront China, US challenge
5 Customs officials martyred as their vehicle ambushed by terrorists in D I Khan
Pak-New Zealand match called off due to rain
NHA restores traffic on roads affected by recent rains in Balochistan
China to fully support Pakistan's efforts against terrorism: Ambassador Jiang
U.S. envoy calls on Foreign Minister Ishaq Dar
More Stories From Pakistan
-
Law minister calls on Opposition in NA to uphold principles of parliamentary decorum, etiquette
5 minutes ago -
Interior Minister condemns suicide attack in Karachi
5 minutes ago -
Death tolls increases to 36, 46 other injured in rain-flood related incident in KP
14 minutes ago -
Two more MNAs take oath
24 minutes ago -
12 criminals held
25 minutes ago -
Saudi Assistant Minister of Defence calls on army chief
37 minutes ago
-
Renowned comedian Umer Sharif remembered on his birth anniversary
44 minutes ago -
NA Speaker announces six-member panel of chairpersons
45 minutes ago -
Death anniversary of Urdu writer Imtiaz Ali Taj observed
55 minutes ago -
Heavy downpour disrupts power supply from 124 PESCO feeders: Spokesman
55 minutes ago -
19 shops sealed for decanting
1 hour ago -
SPSC announces result of Sub Inspector Anti-corruption Establishment
1 hour ago