NEW DELHI :
A nascent recovery in India’s economy faces "unknown" risks from the coronavirus outbreak, according to a top government adviser.
“There are some green shoots, but I would be cautiously optimistic," Krishnamurthy Subramanian, the chief economic adviser said in an interview in New Delhi on Monday. “There are known unknowns and unknown unknowns. It’s hard to model unknown unknowns.“
The virus epidemic is seen curbing growth in China and the global economy, which will weigh on India’s outlook at a time when the government is forecasting a rebound. Asia’s third-largest economy will likely expand at 6%-6.5% in the year beginning April, an improvement from an estimated 5% this year, Subramanian wrote in a report last month.
The virus “creates some uncertainty, especially in China," Subramanian said Monday, adding that it’s difficult to quantify the impact of the epidemic.
Bottomed-out
Recent purchasing managers surveys for manufacturing and services as well as industrial output data indicated some recovery in India after six straight quarters of decelerating growth. That optimism was tempered by a central bank survey that showed worsening consumer sentiment.
“It’s quite likely that we might have bottomed out," Subramanian said. “I would wait for it to develop in a trend as sometimes these indicators can be volatile."
The Reserve Bank of India (RBI) last week left interest rates unchanged amid high inflation, while adopting unconventional policy tools to lower borrowing costs.
No tours
The central bank also flagged risks to tourist arrivals and global trade from the spread of coronavirus, which has already claimed more than 1,000 lives around the world.
The spread of the coronavirus will cost the world economy more than $280 billion in the first three months of the year, putting an end to a 43-quarter global growth streak, according to Capital Economics Ltd.
“I would watch the coronavirus situation," Subramanian said. “If you go by SARS episode that’s something you can draw lessons from. India wasn’t impacted that much. That’s what I would expect."
India ranks 17th among countries at risk of coronavirus import
Of the countries most at risk of importing coronavirus cases, India ranks 17th, researchers have found on the basis of a mathematical model for the expected global spread of the virus that originated in China's Wuhan area in December 2019.
So far India has reported 3 coronavirus positive cases — all from Kerala.
Among the airports in India, the Indira Gandhi International Airport in New Delhi is most at risk, followed by airports in Mumbai, Kolkata, Bengaluru, Chennai, Hyderabad and Kochi, according to the model.
The new model for predicting global novel coronavirus cases has been developed by researchers from Humboldt University and Robert Koch Institute in Germany.
"The spread of the virus on an international scale is dominated by air travel," said the study.
"Wuhan, the seventh largest city in China with 11 million residents, was the relevant major domestic air transportation hub with many connecting international flights before the city was effectively quarantined on January 23, 2020, and the Wuhan airport was closed. By then the virus had already spread to other Chinese provinces as well as other countries," it added.
The researchers said that it is possible to estimate how likely it is that the virus spreads to other areas by looking at air travel passenger numbers.
"The busier a flight route, the more probable it is that an infected passenger travels this route. Using these probabilistic concepts, we calculate the relative import risk to other airports. When calculating the import risk, we also take into account connecting flights and travel routes that involve multiple destinations," said the study.
The top 10 countries and regions at risk of importing coronavirus cases are: Thailand, Japan, South Korea, Hong Kong, Taiwan, USA, Vietnam, Malaysia, Singapore and Cambodia, according to the model.
While Thailand's national import risk is 2.1 per cent, it is 0.2 per cent for India, found the research.