Report By Nandika Chand | Bengaluru | Last Updated at May 20 2020
The report said differences in policy approaches are straining relations between countries that promote nationalism and those that argue for a coordinated international response.
India has lost over $16 billion in foreign investment as the novel coronavirus pandemic continues to drive concerns of a major economic recession in Asia. According to Congressional Research Centre’s latest report on global economic effects of COVID-19, foreign investors have pulled out about $26 billion from developing Asian economies.
It said over 30 million people in Europe – Germany, France, Spain, the UK and Italy have applied for state support. “While almost all major economies are shrinking as a result of coronavirus, only three countries – China, India and Indonesia are projected to ‘experience small’ but positive rates of economic growth in 2020,” it said.
The report revealed that differences in policies are straining relations between developed and developing economies and between northern and southern members of the eurozone, challenging alliances. “Differences in policy approaches are straining relations between countries that promote nationalism and those that argue for a coordinated international response,” it said.
Moreover, the pandemic is challenging governments to implement monetary and fiscal policies that support credit markets and sustain economic activity. The report also highlighted the IMF’s recent report that recovery of the global economy could be weaker than projected. “This is the result of lingering uncertainty about possible contagion, lack of confidence, and permanent closure of businesses and shifts in the behavior of firms and houses,” the CSR said.
Furthermore, the decline in industrial activity has reduced demand for energy products like crude oil, in turn causing prices to crash but positive for consumers and businesses as a whole.