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Business News/ News / India/  India 1 of 3 in G20 likely to grow in 2020, 500m may slip into poverty: Survey
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India 1 of 3 in G20 likely to grow in 2020, 500m may slip into poverty: Survey

China and Indonesia are the only other two nations in G20 which are seen growing in 2020, the survey said
  • It said most emerging markets like India are facing weaker health systems and lower capacity to shore up economies
  • Although emerging economies had exhibited higher growth before the crisis, many were affected later than economies in the developed world.Premium
    Although emerging economies had exhibited higher growth before the crisis, many were affected later than economies in the developed world.

    MUMBAI: India is one of the only three economies in G20 that is expected to grow in 2020 even as 500 million people are at a risk of slipping into poverty due to the lockdown induced by the covid-19 pandemic, says a 30 May global survey jointly conducted by Marsh & McLennan Companies (MMC) and Zurich Insurance Group (Zurich) in collaboration with the World Economic Forum.

    “The euro area is anticipated to be the hardest hit, with India, China and Indonesia the only G20 countries expected to grow in 2020," said the study, adding that this is the fallout of the covid-19 crisis, which will accelerate reshuffling of geo-economic influence.

    For instance, through April, China, Germany and Japan had begun returning to normal well before other countries reached peak infections. Such shifts may redistribute global influence and enhance greater regionalization, said the study.

    The survey was conducted from 1 to 13 April among the forum’s community of risk professionals and the professional networks of MMC and Zurich.

    “So far, emerging economies are expected to contract by 1%, as opposed to 6.1% for advanced economies, which were already at risk of stagnant growth," said the survey.

    Although emerging economies had exhibited higher growth before the crisis, many were affected later than economies in the developed world.

    The survey warned that most emerging markets, like India, are facing a twin battle of weaker health systems and lower capacity to shore up their economies.

    The study revealed that on an average, one new infectious disease emerges in humans every four months and 75% of them come from animals; one of them was the novel coronavirus.

    The survey suggested that for sustaining growth by preventing disruptions due to infectious diseases, emerging economies need access to clean and stable water supplies.

    “Globally, billions of people lack access to safe water, sanitation and handwashing facilities. Tackling this basic problem will be important to containing the novel coronavirus – especially in emerging and developing economies – and one factor helping to prevent future outbreaks."

    The International Labour Organization forecasts massive unemployment with SMEs and the informal sector having particular difficulty in sustaining or recovering business.

    On the human health front, the survey stated that up to 45% of adults have felt adverse effects on mental health, with up to 37% showing signs of psychological distress and up to 70% feeling this period was the most stressful of their careers.

    Even though some of the emerging nations like India are expected to do better than developed economies, the survey suggested that in developing countries, unemployment among the youth has risen steadily, creating a risk of social unrest.

    Today’s young workers are often self-employed, members of the casual, informal and gig-economy labour markets, or are employed by SMEs. These sectors were the first to be affected by the economic shutdowns, said the study.

    “Covid-19 began as a health crisis, then quickly became an economic crisis and an energy crisis, highlighting the inherent interdependencies of global risks."

    The survey which took views of nearly 350 senior risk professionals who participated in the COVID-19 Risks Perception Survey, said 68.6% of the respondents identified a prolonged global recession as a top concern for businesses due to covid-19.

    As countries deploy massive assistance and stimulus packages, public debt is now expected to reach new records; in advanced economies alone, it is expected to increase from 105% of GDP in 2019 to 122% in 2020, says the survey.

    The International Monetary Fund anticipates world output to drop by 3% in 2020 – much worse than during the 2008-2009 financial crisis – global trade is predicted to collapse between 13% and 32%, while foreign direct investment (FDI) inflows are estimated to fall between 30% and 40%.

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    ABOUT THE AUTHOR
    Anirudh Laskar
    Anirudh reports on significant corporate matters including large mergers and acquisitions, India's emerging e-commerce sector and regulatory issues in the corporate and financial services industry. Over the past 17 years, he has covered many beats including banking, NBFCs, aviation, automobile, insurance, markets, SEBI, IRDAI, mutual funds, investment banking, private equity, deals, and conglomerates.
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    Published: 01 Jun 2020, 02:49 PM IST
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