CII: COVID-19 Impact Paper on Indian Industry26.03.2020
The outbreak of Covid-19 in China is expected to have significant global economic impact:
- Economic slowdown – China’s GDP is expected to decelerate by 1-1.25 percentage point over 2020 due to halting of economic activities in key production centres. As of 14th February, 48 cities and 4 provinces are in lockdown mode. This will have knock-on impact on global economic growth as China accounts for 19.71% of global GDP at purchasing power parity. It is estimated that global GDP will suffer an impact of -0.5%.
- Trade – China is the world’s largest exporter and second largest importing nation, accounting for 13% of world exports and 11% of world imports. The lockdown affecting 500 million people in the country will deeply impact its consumption of goods.
- Supply chain disruption – With China as the world’s largest manufacturer and exporter, closure of its industries for a significant time period is likely to impact production centres across the world. China is currently the top supplier of goods for over 100 countries.
- Commodities – Oil demand is expected to fall by 30% due to the fall in Chinese consumption and this will also resonate in other commodities.
- Logistics – Shipping rates have already fallen to record lows.
Please find the full impact paper from the Confederation of Indian Industry (CII) in the Downloads section.