The coronavirus pandemic has shaken the world markets | Editorial HT – editorials
Gross domestic product (GDP) data published on Friday, for the third quarter ended in December, has only served to cloud the economic narrative. GDP growth reached 4.7%, which is higher than the 4.5% growth seen in the September quarter, except that due to revisions in previous data, the growth of the September quarter has also been revised, to 5.1% . Simply put, the growing narrative that the economy had bottomed out, indicated by some high frequency data, no longer holds. In fact, growth only seems to have slowed further, from 5.1% in the September quarter to 4.7% in the December quarter.
Economists have pointed out that significant revisions of the data make it difficult for them to assess the health of the economy and that is something that the government would do well to remember. Regardless of the review, the narration of the worst that had happened began to weaken. That is due to the coronavirus. The World Health Organization may be reluctant to call it a pandemic, but it is clearly one, and the virus now shows some alarming characteristics (including community transmission). So far, the virus has also not demonstrated the unsustainability and unfeasibility that other similar viruses did in the past: their growth faded over time. The coronavirus seems to be declining in China, but marching through Europe, West Asia, the United States and Africa. India has been lucky so far.
Concerns about the pandemic have already affected world markets, and it is clear that the pandemic will have an impact on world trade and supply chains, global and local economies, and also on the free movement of people. This quarter, the fourth of fiscal year 2019-2020, is likely to be the most affected, which means there is little chance that the Indian economy will show a recovery in the three months ending in March.