currently India is facing dual shock
b) Financial & economic slow-down
The supply and Demand shock:
- China CoVID-19 lock down has created Global China Centered supply chain disruption.
- There is also affect on Demand as lot of sectors got hit.
eg: Tourism. travel etc
- Rising Infections is Europe and US is big concern:Because these are service Driven Economies so,drop in consumption has affect World.
Global Spill over of CoVID-19
- Hitting economies air waves: affects china supply, companies working at full capacity.
- Hits on Travel & Tourism till June.
- Demand is Us & Europe remains low.
- Global GDP to remain low is 1st Half.
What is the Impact on India?
Economic will get hit:
- India is not on the China-centered country But has almost 14 % of Imports
- Slow down is International and domestic travel tourism
- social distancing will also affect the retail sales.
- Indirect effects of weaves Global Demands and low confidence
- GDP Growth is to get slow-down and expected to be at 4-5%.
Impact on Domestic sector: -
a) Spill over effect of Yes bank.
b) fallout of the Shadow banking slowdown.
Way forward :
a) optimal policy to tackle covid-19
b) Liquidity easing and policy accommodation
- Economically Impact is mainly due to week domestic balance sheet.
- We need to take care of credits Risk and the Prioritizing of financial stability