Impact of COVID 19 on Indian as well as Global Economy: Fitch solution has cut India’s Economic Growth Rate Forecast to 1.8% for the financial year 2020-21. According to the rating agency, due to the coronavirus epidemic, personal consumption is projected to decrease and large scale earnings are reduced due to which the estimate of real GDP growth rate for the financial year 2020-21 has been reduced from 4.6 percent to 1.8 percent.
According IMF’s Gita Gopinath warns global economy can lose $9 trillion due to coronavirus. Every country will have some organisation which tracks the economy of that specific country will look at their own economic growth but there is an overall organisation which looks not only at the country’s economy but the over on global economy it is IMF (international monetary fund ) sector which Impact of COVID-19.
Some of Sector wise impact to indian economy as well as globally as follow :
FMCG SECTOR
This sector significantly contributes fourth largest towards GDP in the economy.
the flow of FMCG or any other sector as following:
Raw material Problem is that Majority of supply chain management right now is disrupted because there are a lot of c k post as well as free movement of goods in our country is not as free right now versus before the current situation. I personally feel that raw material procurement itself is a big challenge for the FMCG sector.
Production is going to be very smooth right now because of the lower demand. factories might not themselves work at full capacity so let’s say whatever is the current capacity they might be working at is 50% capacity or 60% capacity because of the overall economy position . production itself depends on demand for sales.
Sale also dropped due to economic position under current situation.FMCG sector is not as badly hit as other sectors but here FMCG can be divided into two parts one can be essential goods and one can be luxury goods.
Realisation of money Under the current scenario do you think that customers are going to be paid on time or debtors are the realise on time !
what will be going to emerge under FMCG sector after this pandemic ?
Essential goods :
Under Essential goods phase at which the demand/sales/ liquidity falls the phase at recovery also going to be the same.
Lury goods :
“U” shaped recovery is after fall recovery is a little bit sluggish getting back after a small period from at the bottom of the line. one thing gets back to normal then starts putting up at a higher rate.
Pharma sector
A recent KPMG report states that the country’s pharma exports add up to $13.7 billion (while imports stand at $1.99 billion) and it meets 50% of the global demand for generic drugs. The problem is we import an estimated 70% of active pharmaceutical ingredients (APIS) from China. Understandably, the COVID-19 crisis and the consequent lockdown served a gut-punch to the industry. There have been freight shutdowns, non-availability of labour, and a spike in cost of a few imported raw materials.
Focusing inwards is going to be on every country’s agenda and India needs to figure out a way to become globally competitive. That’s where I believe that India’s biomedical industry has a lot of potential because not every country can be self reliant and export biomedical products. We have a mature pharmaceutical industry due to our generics and are also developing strengths in biopharmaceuticals with companies such as ours. We have seen during this crisis that we are strong in terms of equipment manufacturing. India also has capabilities in diagnostics because of the ability to quickly assemble kits. So, the focus should be on expanding and scaling the manufacturing of these sectors in a self sufficient way. Similarly, with vaccines, there should be more focus on innovation. There are a lot of opportunities in the biopharma and biomedical segments.
what is going to emerge post this pandemic?
It all depends on how long the world will take to recover from COVID-19. Organisations such as the IMF have already declared a global recession. In India, we. could lose 30-40 million jobs by the end of the year if we are un- able to bring the economy back on track. The world economy, which was estimated at $90 tril- lion, was already under a $260 trillion debt burden, and it will get worse. Many believe it will take at least another year to see anything close to normalcy. I think we need to look at the geopolitical dynamics and see how the world is going to shape up after COVID-19.
Crude oil sector
Due to the continued lockdown in the entire world due to Corona, the demand for crude oil has fallen completely, due to which the price of crude oil is at a lower level for many years. Due to declining oil price and demand, the financial condition of oil producing countries is deteriorating, due to which Gulf countries have to sell their bonds. Saudi Arabia, which holds important status in OPEC, collected $7 billion through bond sales last week.
Airline sector
Airlines are in poor condition due to continued lockdown due to Corona. All the airlines have been closed since March 25, due to which the airline’s earnings are completely closed, but there are many types of Charges like Salary, Maintenance.
The burden on companies has increased so much that airlines have decided to cut salaries.According to SpiceJet, in April, Employees will get the same salary as the number of days they have worked
Aviation regulator DGCA has given instructions to aviation companies not to book travel tickets after May 3, due to which the shares of these companies have fallen.
Apparel industry
India’s Apparel Industry has been greatly affected by the lockdown in most countries of the world due to the coronavirus.
Indian Apparel Industry, which has a strong hold in global apparel exports, is going through the events of not taking order cancellation and consignment delivery at this time, it is estimated that the exporters here will be losing about $ 4 billion. With this, there has been a lockdown in the country, due to which production is also stopped here. Not only this, global buyers have not yet sent payment for goods sent to them months ago.