Coronavirus Pandemic: Lockdown Lifted, Commercial Activities Resumed Yet Global Economy May Take 5 Years To Recover?

World Bank's chief economist says the recession caused by the Coronavirus pandemic will last longer in some countries. Poorest will be harder hit by the crisis in rich countries and the poorest countries will be harder hit than richer countries.

Credit: Getty Images

While the countries across the World have started to slowly bring the life back to the tracks which went off grid due to the COVID-19 pandemic, experts are of the belief that the global economy may take upto five years to recover from the Coronavirus outbreak that has resulted in a severe global economic contraction. Whenever the economy is put through the ringer, debates around the potential recovery surface and current state mid-pandemic is no exception. Speaking on this note, World Bank's chief economist Carmen Reinhart on Thursday expressed concerns over the economic crisis originated by the Coronavirus pandemic that has hit hard almost every country on the globe. As quoted in a Reuters report, Reinhart while speaking during a conference held in Madrid said that there will probably be a quick rebound as all the restriction measures linked to lockdowns are lifted, but a full recovery will take as much as five years. World Bank's chief economist went on to say that the recession caused by the Coronavirus pandemic will last longer in some countries than in others. "It will exacerbate inequalities as the poorest will be harder hit by the crisis in rich countries and the poorest countries will be harder hit than richer countries," Reinhart said, adding that for the first time in twenty years, global poverty rates will rise following the crisis. Indian Economy Amid COVID-19 Pandemic India recently reported a Gross Domestic Product (GDP) contraction of 23.9 percent for the first quarter of 2020-21. It has come as a big setback especially as the country is reeling under the Covid 19 pandemic. Readings revealed by the government of India reveal that GDP at Constant (2011-12) Prices in Q1 of 2020-21 is estimated at ` 26.90 lakh crore, as against ` 35.35 lakh crore in Q1 of 2019-20. It showed a contraction of 23.9 per cent as compared to 5.2 per cent growth in Q1 2019-20. Last month, the World Bank had said India needs to continue with reforms to reverse the economic slowdown and put its economy back on a sound footing towards a 7 per cent-plus growth path. On this, Former Reserve Bank of India governor Raghu Rajan also expressed his concerns over what he calls India's alarming -23.9 per cent quarterly GDP and claimed that the data is only going to worsen once the impact of the pandemic on the informal sector is accounted for. Meanwhile, Credit rating agency Crisil has revised the FY21 real GDP growth forecast for India to (-) 9 percent from (-) 5 percent projected in May. According to the rating agency, with the pandemic's peak not yet in sight and the government not providing adequate direct fiscal support, the downside risks to its earlier forecast have materialised. As per the report, Crisil expects a permanent loss of 13 percent of real GDP over the medium term.