Dr . Mithilesh Kumar Sinha
Professor , Department of Economics , Nagaland University , Lumami- 798627 E-mail : Mithileshkumarsinha5 @ gmail . com
PROLOGUE
lobal growth has hit unprecedented depths of despair amidst COVID-19 ,
Gwith substantial risks of even more
severe outcomes remaining . IMF ' s World Economic Outlook of April 2020 projects global output in 2020 to contract by 3 percent with the output of advanced countries contracting more than emerging market and developing economies . Aptly called the month of " Global Lockdown ," April 2020 saw significant indices of manufacturing and services across countries declining to record lows on the back of supplyside disruptions . Global energy prices plunged , the US unemployment rates surged to double digits , Eurozone consumer confidence , and the UK retail spending fell , signaling the onset of a demand crisis as well . This demand shock weighed heavily on commodity exporter countries as their currencies depreciated relatively more sharply . Global financial markets dramatically sold of equity and debt in March 2020 , which led to the crashing of benchmark equity indices and tightening bond yields before a modest recovery in April 2020 . To fight output contraction , public authorities across the globe announced a substantial fiscal stimulus estimated at USD 11 trillion , a massive injection of liquidity by the central banks . These measures appear to have arrested a free fall of global output , as seen in the recent high frequency real activity indicators .
Across the world , trade and trade-related measures may have moderated a sharp contraction in global merchandise trade .
( https :// www . ibef . org / download / economic-report-July- 2020 . pdf ).
Global financial markets have also been relatively stabilized with a recovery in asset prices , a decline in credit spreads , and an increase in international bonds by emerging markets . Crude oil markets are re-balancing after an unprecedented demand-induced fall in prices in March and early April 2020 . However , downside risks to global recovery stem from an over-leverage in the non-financial sector , including external debt financing risks , simmering trade and geopolitical tensions , and u n p r e c e d e n t e d C O V I D - 1 9 i n d u c e d unemployment losses amid fears of a second major wave of infections . India imposed a strict lockdown from 25 th March 2020 . April 2020 was the month of an economic standstill with restrictions on various activities eased in May 2020 as the Government of India made a courageous choice of supporting livelihoods that made the c o n t a i n m e n t o f t h e p a n d e m i c m o r e challenging . As restrictions were further eased , the country entered the unlock phase in June 2020 . The loss of economic output from more than two months of lockdown was first triggered from the supply side as labor stayed away from work . The demand side caused further output loss as the consumption of
Economic Challenger // ISSN 0975-1351 / Issue 90 , Jan .-March 2021 India ' s Economy on V-shaped Recovery 3