India has followed a different strategy than many other nations in terms of the response to COVID-19. It has been of quick and complete lockdown. Which makes sense for such a large country with that dense a population. If the COVID-19 had gotten out of control, there was enough reason to believe that it will severely impact the economy as a whole. Even more so perhaps than the impact of the lockdown.
Now, IMF – not that they have great credentials when it comes to handling many nations’ economies and related woes – have suggested that the global economy will contract by 3% in 2020. In 2021, if the containment strategies work then IMF predicts that the growth will be around 5.8% after a rebound.
India may be the bright spot – or brighter should we say – in the world.
IMF endorses India’s response to COVID-19
IMF have also endorsed India’s “proactive response” to the coronavirus situation, which saved countless lives. As we have said earlier, had India not done the lockdown when it did, the country would have seen almost a million cases by now.
“India entered the pandemic turmoil in the midst of a credit crunch-induced slowdown and its recovery prospect becomes more uncertain,” Chang Yong Rhee, the Director of the IMF’s Asia and Pacific Department, told reporters during a news conference here.”Despite the economic slowdown, the government implemented a nationwide lockdown and we support India’s proactive decision,” Rhee said. (Source: We support India’s ‘proactive’ COVID-19 response: IMF)
They are projecting that India’s 2020 growth will be around 1.9%.
This is a time when Asia as a whole will face one of the worst ever crisis in recent history. During the past downturns, the growth rates in Asia were substantially impacted even though they were positive – for example, Global Financial Crisis (4.7 percent) or the Asian Financial Crisis (1.3 percent). This time around, however, the projection is of standstill growth (or Zero). So, this situation is much worse for everyone in the world than any previous crisis that we have seen.
China, meanwhile, is expected to see a growth of 1.2% and Japan and South Korea will see a contraction of 5.2% and 1.2% respectively in 2020.