Chief Economic Adviser (CEA) Krishnamurthy Subramanian has said that the coronavirus outbreak will not have much impact on the next fiscal’s economic growth. Subramanian also said that India can achieve 6 per cent Gross Domestic Product (GDP) growth in FY21. However, he also mentioned that India may take some more time to reach 7 per cent growth. On coronavirus, he added that he sees an opportunity in expanding exports.
Besides, on the back of a rapid increase in the cases of coronavirus worldwide, the estimates of economic growth have been substantially lowered. UN’s trade and development agency (UNCATD) said that the coronavirus outbreak could cost the global economy up to $2 trillion this year and it also warned that shock from the epidemic will cause a recession in some countries and depress global annual growth to below 2.5 per cent.
Amid a rising uncertainty about the magnitude of impact, major economies are also considering rate cuts to boost demand. Last week, the US Fed Reserve cut the interest rates by 50 basis points, which was against the market expectation. However, the Reserve Bank of India (RBI) had maintained the status quo on interest rates in the last two Monetary Policy Committee meet after five straight cuts of 135 points altogether in 2019. RBI Governor Shaktikanta Das had said that the Reserve Bank is ready to face the situation.