Coronavirus Pandemic to Set the Economy Back by Years?

Guwahati, March 15, 2020:

At a time when the economy of India is already in the doldrums, the coronavirus outbreak seems to have put paid to any hopes of a revival. Moreover, with the 2020 US Presidential elections drawing ever closer, we could be headed towards another massive recession a la 2008. Nani Gopal Mahanta, a prominent economist from the State has opined.

Now, both the health and the world's economy is under threat. All the stock markets -- in London, Frankfurt, Tokyo, Paris -- dipped to unprecedented lows. On March 12, Indian investors lost over Rs 11,000 in investments. Since China is the nerve-centre of the world economy, the markets worldwide have been hit hard by the corona affliction.

Nani Gopal Mahanta, opining on the state of Assam amid the virus' outbreak, said that the world economy will be severely affected. On top of that, he added that the State of Assam will be set back at least by 5 years. "Impact will be there; service sector will go back by 5 years. If there is a spread, the result will be catastrophic. Not only in India, everywhere this is happening. Hospital, malls, everything has been impacted. In Assam, the result will be catastrophic. The situation will go away, but we will need a gameplan on how to bounce back in a corona free world.."

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How to bounce back? Mahanta says that will depend on Assam becoming self-reliant and the Government's strategy to revive the economy."We need to become a producing state; all the needfuls will need to be produced here. Now, the onus lies squarely on the Government; Assam is already a backward economy and we were only just limping back; malls only came up recently. However, now, there is a strong chance that we will go back by 5 years..."

With the entire world being placed under lockdown due to the outbreak of the pandemic coronavirus, the economy is likely to take a massive hit heading into the United States' Presidential election, the gala political event held every four years.

This comes at a time when the Indian GDP growth had halved from its peak, and unemployment is at an all-time high. Thus, the COVID-19 is bound to further affect the economic growth. Moreover, it cannot be ascertained how long the coronavirus will affect us, as there is no known vaccine for the disease. It will spread far and wide and eventually die a natural death as all epidemics do.

Closer to home, as precautions against the pandemic, the Governments have ordained the closure of schools, shopping malls, gymnasiums, and swimming pools -- which will undoubtedly cost the business establishments crores and crores of rupees.

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Here in India, for instance, the cancellation of the Indian Premier League (IPL) promises to severely impact the economic condition of several hundred households that directly or indirectly depend on the flagship event to earn their keep.

Not only that, thanks to the cancellations, the economy has been brought to a screeching halt. Now, real time reports show 156,620 confirmed cases of the COVID-19, 5,948 reported deaths, while 67,003 recovered from the pandemic. If the trend continues, we could be looking at a 2018-like recession. If the virus persists for a year, we are looking at at least millions of deaths and hundreds of thousands of millions lost to the world economy.

Still, warning signs of a U.S. economic slowdown have emerged, raising fears the decade-long economic expansion could be on its last legs. Meanwhile, fears over a potential recession and plunging stock markets fueled by the coronavirus pandemic could threaten President Trump’s efforts to secure a second term.

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