The second wave of the pandemic has struck India with a devastating impact that could have a significant impact on the world economy.
April 30 (UPI) — The second wave of the pandemic has struck India with a devastating impact. With over 300,000 new cases and 3,000 deaths across the country each day, the total number of deaths has just passed the 200,000 mark — that’s about 1 in 16 of all COVID deaths across the world. It is also evident that the India statistics are significant underestimates. The virulence of the second wave in India seems to be related to a confluence of factors: government complacency, driven by poor data collection and being in denial about the reality of the data; a new variant with a hockey stick-shaped growth curve; and some very large and unregulated religious and political events. It is clear that there is now a humanitarian crisis of significant proportions. India is a country of 1.4 billion people and makes up a sixth of the world’s population. Here are some ways in which it is also going to affect the world economy: 1. A lost year for India is the fifth-largest economy in the world and contributes significantly to world economic growth. With relatively high growth rates (of between 4% and 8%) and its large size, it has a significant impact on the world economy. Even in early 2020, before the pandemic took hold, the International Monetary Fund had cited India’s indifferent output as the main reason for sluggish world growth figures in 2018 and 2019. The IMF downgraded its 2020 forecast to 5.8% partly because it expected more of the same from the subcontinent. Now it looks as if world growth for 2020 was down by around 4%, with India down 10%. Everyone has been expecting a great rebound in 2021 from both India and the world, but that now looks seriously doubtful. For instance, Sonal Varma, India chief economist at the investment group Nomura, predicts that India’s GDP will shrink around 1.5% in the current quarter. Coupled with significant pandemic-related problems in Brazil and South Africa, we might expect the impact on world growth to be considerable — even before taking any knock-on effects into account.
