The coronavirus pandemic shock is different to the previous recession, believes Prachi Mishra, Managing Director, Global Macro Research, Goldman Sachs. Speaking on Limping Economies and the Recovery Task at the Business Today's India's Most Powerful Women event, Mishra said that fear and scare in this scale was not prevalent in the previous recessions. The response to the shock in itself will have a damaging effect.
Mishra said that global recovery has started and disposable incomes are steadily getting stable. "Just when one thinks it is slowing down, it rises in the form of a second wave. Economic recovery will be a daunting task till the coronavirus vaccine is developed," she said. Mishra said that while developing a coronavirus vaccine takes a long time, in such unusual times development has been fast forwarded. She however, alerted that there will be redistribution of the global impact -- everyone will get a slice of the shrunken pie.
Speaking about the impact on India, she said that India stands apart just in terms of its population. "While the virus was ravaging Italy, a population the size of Italy was moving to home states," she said, talking about the migrant crisis. "There has been no lockdown near to one implemented for 1.3 billion people. By and large effective enforcement has been a challenge. Social discipline is a pipe dream in India," she added.
Talking about recovery, Mishra asked, "Where do we go from here?" "Host of eco indicators show that the economy is 75 per cent back to pre-covid levels, but is still behind other countries. If we see further macro economic policies, recovery could be faster," added Mishra.
She also spoke about women in credit and finance and pointed out that women are less likely to be questioned by the credit bureau as per research but also they are likely to default less.