In its latest Monetary Policy report, the Reserve Bank of India - RBI has stated that the global economy is expected to go into recession after taking into account the impact of the COVID-19 pandemic. It also says that aggregate demand is expected to be impacted adversely by likely recession in the global economy, caused by disruptions in global supply chains, travel and tourism, and lockdowns in many economies.
The report suggests that while efforts are being mounted on a war footing to arrest its spread, COVID-19 would impact economic activity in India directly through domestic lockdown. Second round effects would operate through a severe slowdown in global trade and growth. It also says that the lockdown is expected to significantly lower aggregate demand in both rural and urban areas. (AIR)