Lockdown After-Effects: GDP Contraction at an All Time Low in G-20 Countries
GDP contraction after lockdown
The coronavirus pandemic is still spreading its wings, and the world is already facing it's after-effects. The year 2020 is the year of "The Great Lockdown" and economic shutdowns. Globally, the markets are falling, and we are on the verge of another blackout. Unemployment rates are also high, and the curve is turning to a downward spike. Being a "Millennial," it feels like our eyes do not deserve to carry dreams in them. The truth is harsh, and most of the media is busy broadcasting petty politics. It's high time to look at the broader picture and take steps to avoid the most significant fall the global economy will witness. The red signals are already visible from the data of the GDP growth in Q2 of 2020.
Figures of GDP Contraction in Q2 - 2020
According to IMF's Chief Economist, Gita Gopinath, the GDP growth in G-20 countries is historically low. Instead of witnessing growth, each country, except China, is on a downfall in the second quarter. China's economy is back on progressive track after a weak Q1. However, the other 19 countries have negative GDP figures. The data means that instead of growing, all the markets will suffer massive GDP contraction in 2020 unless the condition improves in Q3. Countries like Russia, USA, Germany, and Canada, are reporting negative growth that is near double figures. Other countries in the European Union are also below -11% in GDP. Great Britain is also suffering from -20.4% GDP contraction in the second quarter of 2020.
The Worst Hit Economy in Lockdown - India
India, generally considered the most prominent developing market, is the worst hit among the G-20 countries. In the Q2 of 2020, India is witnessing a GDP downfall of -25.6%. Before lockdown, India was, on average, gaining 6.8% GDP every financial year. India was also one of the earliest adopters of the lockdown policy when the COVID-19 infection spread. The quick response to the incoming pandemic was applauded by the citizens. However, it looks like the unplanned lockdown is taking its toll on the country's economy now. Economists now expect the contraction to continue till 2021. The data collection is also incomplete because of ongoing lockdown, so the stats may look even worse after a complete survey.
We are waiting for an official statement addressing the economic state of the country from the Government of India. However, there is no such announcement so far. Its a matter of grave concern, and some stringent measures are required to uplift the falling economy.