The pandemic has created the largest economic shock the global economy has spectated in decades, resulting in a slump in the global activity
By Rupinder Singh Sachdeva
The impact of the spread of Pandemic COVID-19 on global trade and supply chains have undermined the growth prospects of world trade and economic growth.
The deepening of the contraction in global growth and trade during the recent years has been accentuated by the outbreak of pandemic COVID-19 and its rapid spread has further crippled external demand. International organizations such as WTO has estimated world trade to fall by 9.2% in 2020 as COVID-19 disrupts normal economic activity across the globe.
The Indian economy too remained standstill under COVID-19 related lockdowns and social distancing. The restrictions caused by the outbreak of COVID-19 resulted in the fall in business & consumer confidence, a slump in production and sales, subdued demand, liquidity crunch, among others. Thereby having an impact on the overall economic and industrial activities.
In these uncertain times, the industrial growth had been largely affected as the Index of Industrial Production (IIP) drastically fell down to the level of around (-)17% in the month of March 2020 as compared to 4.6% in February 2020. This depicted the daunting impact of pandemic COVID-19 on trade and industry.
The economy experienced a collapse in both urban and rural demand in months of April-May 2020, from which the economy is still struggling to revive. The major impact from COVID-19 come in the form of a slump in private consumption with consumer durables production falling 33% in March 2020. The outbreak of the Covid-19 pandemic had severely disrupted the normal working of almost all sectors.
At this background, many international organisations have slashed the growth rate of the Indian economy for the current year due to the daunting impact of pandemic COVID-19 on trade, industry and economy. In addition, the contraction in GDP growth rate, released by the MOSPI, to the level of 23.9% in Q1 FY2021 is worrying.
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