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Market View

Covid-19: Impact on Indian and Global Economy

Q. How do you think it will pan out and what will be the impact on the global economy?

A: We see a larger loss of economic activity in FY21, as thevirus has now spread widely outside China, and theexperience of other countries indicates a high possibility ofa further spread in India. We recently lowered our 2020global growth forecast to 3% from 3.3%, the weakest sincethe global financial crisis.

FPI’s strategy for 2020: Cautious on fiscal math amid fears a rating downgrade

Q. Data shows foreign investors have turned net sellers for India’s sovereign bonds during the last four months. What do you think is the reason?

A: It is because of the flattening of inflation expectations; currently food prices have been constituting a key concern and so has the potential impact of globally elevated oil prices, which is driving domestic inflation. I think this situation is fluid, and you may see a reversal based on views on these subjects evolving over the next few weeks.