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Prospects for Economic Recovery – Due to COVID-19 Outbreak

Covid-19 has already generated a sharp fall in global GDP and a rapid rise in unemployment, but what kind of recovery can we expect once the crisis passes? With the world economy already experiencing a sharp fall in GDP and rapid rises in unemployment, forecasters have been struggling to work out how big it will be and how long it will last. In this article we have analysed prospects for economic recovery due to COVID-19 Outbreak Outbreak. Projections reported by Gita Gopinath, the IMF Chief Economist, suggest the world economy will shrink by 3 percent in 2020, instead of 3.3 percent growth forecast just three months ago. Assuming an early peak in the incidence of the virus (and that the countervailing policies are successful), it will recover strongly in 2021 to achieve growth of 5.8 percent. Pandemic economies are different from normal economies. The coronavirus pandemic like any other fatal ones as before has caused enough damage to our economy. It has affected almost 185 countries. It has posed severe challenges to the international market networks as well as mobility of domestic resources. It has also created a huge delimma between addressing the virus and handling the economy to the government. The shutdown of large part of economy such as industries, sports league, work places and cultural sites has had an impact on the financial status of the country. This pandemic has managed to potentially trigger the economies of all types. Fighting COVID-19’s economic effects will take more than interest rate cuts while having over 8000 Indians affected by it. Though this is the most spontaneous response that could be taken by the central bank, this decision might not provide expected results given that interest rates have already hit rock bottom level. Only monetary policy cannot repair the supply chain. Liquidity injection by the banks can restructure the global traffic undoubtedly only when there are issues with the flow of finance. But the current major problem is the abrupt stoppage of production. It has created both demand and supply problems. Covid-19 has already generated a sharp fall in global GDP and a rapid rise in unemployment, but what kind of recovery can we expect once the crisis passes? With the world economy already experiencing a sharp fall in GDP and rapid rises in unemployment, forecasters have been struggling to work out how big it will be and how long it will last. In this article we have analysed prospects for economic recovery due to COVID-19 Outbreak Outbreak. Projections reported by Gita Gopinath, the IMF Chief Economist, suggest the world economy will shrink by 3 percent in 2020, instead of 3.3 percent growth forecast just three months ago. Assuming an early peak in the incidence of the virus (and that the countervailing policies are successful), it will recover strongly in 2021 to achieve growth of 5.8 percent.