Experts peg India’s cost of coronavirus lockdown at USD 120 billion


К : PTI | Mumbai |

Published : 25. March 2020. 14:23:42

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They also indicated that in the April investigation RBI is likely to reduce the interest rate by 0,65 % and to reduce the interest rate by a further 1 % during the year. (picture)

By linking the cost of the covid 19 lock-up mechanism to 120 billion dollars, the cost of the covid 19 lock-up mechanism is estimated at 20 billion dollars. On Wednesday, analysts drastically lowered their growth forecasts, stressing the need to announce an economic package (around Rs.9 billion) or 4% of GDP.

The Reserve Bank of India (RBI), which was established on 3. April to announce its first two-month policy review, is expected to make a significant reduction in interest rates and also expect to breach budget deficit targets, analysts said.

Prime Minister Narendra Maudie announced a complete three-week blockade of the country to prevent the spread of coronavirus infections in the country. The stock markets were in the red at the beginning of Wednesday’s session with a decline of 0.47%.

We estimate the total cost of closure at about $120 billion, or 4% of gross domestic product (GDP), said a note from the British broker Barclays, which revised its fiscal year 21 growth forecast by 1.7 percentage points to 3.5%.

She clarified that the cost of a three-week national blockade will be only $90 billion, which is more than the previously announced blockades by several states, such as Maharashtra.

They also stated that in their April report, the RBI is likely to cut interest rates by 0.65% and continue to cut interest rates by 1% during the year.

The national broker Emkai praised the politicians for trading earlier than other countries, but said there was little to mitigate the economic impact.

So far, the Indian government has said virtually nothing about the economic impact of the embargo, let alone about measures to mitigate its effects.

The disorganized sector, which already operates under the double effects of decommissioning and the Goods and Services Tax (GST), will be marginalized by these measures, Emkai warned.

He suggested using soft loans for small businesses, the restructuring of loans and the transfer of cash as possible instruments that the government could adopt as part of the economic package.

According to Edelweiss, India has so far lagged behind other countries in its policy response to the crisis, which has been limited to liquidity support, the creation of a task force and some public expenditure measures.

India needs a lot more, says the report, and points out that there is a lot of money on the fiscal front, but few options.

After Minister of Finance Nirmala Sitaraman announced some measures to support the economy on Tuesday, he hinted that the economic aid package was being prepared.

Analysts from Barclays said the government is likely to cite the cause of the natural disasters as part of fiscal prudence for fiscal year 21 and estimate the budget deficit at 5% of GDP compared to 3.5% of the budget.

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