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New Delhi, May 24: The Indian economy is likely to slip into recession in the third quarter of this fiscal as loss in income and jobs and cautiousness among consumers will delay recovery in consumer demand even after the pandemic, says a report.

According to Dun & Bradstreet's latest Economic Observer, the country's economic recovery will depend on the efficacy and duration of implementation of the government's stimulus package.

"The multiplier effect of the stimulus measures on the economy will depend on three key aspects i.e. the time taken for effecting the withdrawal of the lockdown, the efficacy of implementation and duration of execution of the measures announced," Dun & Bradstreet India Chief Economist Arun Singh said.

The report noted that the government's larger-than-expected stimulus package is likely to re-start economic activities.

Besides, measures taken by the Reserve Bank of India like reducing the repo rate by a further 40 basis points to 4 per cent, extending the moratorium period by three months and facilitating working capital financing will also help stimulate the momentum.

Singh said while the measures announced by the government are "positive", most of them have been directed towards strengthening the supply side of the economy, and "it is to be noted that supply needs to be matched with demand", he said.

Besides, "in the absence of cash-in-hand benefits under the government's stimulus package, demand for goods and services is expected to remain depressed", he added.

He further said the loss in income and employment opportunities, and cautiousness among consumers, will lead to a delayed recovery in consumer demand, even after the pandemic. As debt and bad loan levels increase, the banking sector might face challenges.

The report further noted that even as the monetary stimulus is expected to inject liquidity and stimulate demand for a wider section of the economy, the channelisation of funds from the financial institutions will be subjected to several constraints.

The foremost concern being increase in risk averseness, as the balance sheets of firms, households, and banks/NBFCs have weakened considerably and low demand for funds by firms as production activities have been on a standstill during the lockdown period, Singh said.

India has been under lockdown since March 25 to contain the spread of the coronavirus, resulting in supply disruptions and demand compression.

Prime Minister Narendra Modi imposed a nationwide lockdown to control the spread of coronavirus on March 25. It has been extended thrice, with some relaxations. The fourth phase of the lockdown is set to expire on May 31. 

Feb 17: Chinese authorities on Monday reported a slight upturn in new virus cases and 105 more deaths for a total of 1,770 since the outbreak began two months ago.

The 2,048 new cases followed three days of declines but was up by just 39 cases from the previous day’s figure. Another 10,844 people have recovered from COVID-19, a disease caused by the new coronavirus, and have been discharged from hospitals, according to Monday’s figures.

The update followed the publication late Saturday in China’s official media of a recent speech by President Xi Jinping in which he indicated for the first time that he had led the response to the outbreak from early in the crisis. While the reports were an apparent attempt to demonstrate the Communist Party leadership acted decisively from the start, it also opened Xi up to criticism over why the public was not alerted sooner.

In his speech, Xi said he gave instructions on fighting the virus on Jan. 7 and ordered the shutdown of the most-affected cities that began on Jan. 23.

The disclosure of his speech indicates top leaders knew about the outbreak’s potential severity at least two weeks before such dangers were made known to the public. It was not until late January that officials said the virus can spread between humans and public alarm began to rise.

New cases in other countries are raising growing concerns about containment of the virus.

Taiwan on Sunday reported its first death from COVID-19, the fifth fatality outside of mainland China. Taiwan’s Central News Agency, citing health minister Chen Shih-chung, said the man who died was in his 60s and had not traveled overseas recently and had no known contact with virus patients.

Japanese Prime Minister Shinzo Abe convened an experts meeting to discuss containment measures in his country, where more than a dozen cases have emerged in the past few days without any obvious link to China.

“The situation surrounding this virus is changing by the minute,” Abe said.

Japanese Health Minister Katsunobu Kato said the country is “entering into a phase that is different from before,” requiring new steps to stop the spread of the virus.

Japan now has 413 confirmed cases, including 355 from a quarantined cruise ship, and one death from the virus. Its total is the highest number of cases among about two dozen countries outside of China where the illness has spread.

Hundreds of Americans from the cruise ship took charter flights home, as Japan announced another 70 infections had been confirmed on the Diamond Princess. Canada, Hong Kong and Italy were planning similar flights.

The 300 or so Americans flying on U.S.-government chartered aircraft back to the U.S. will face another 14-day quarantine at Travis Air Force Base in California and Lackland Air Force Base in Texas. The U.S. Embassy said the departure was offered because people on the ship were at a high risk of exposure to the virus. People with symptoms were banned from the flights.

About 255 Canadians and 330 Hong Kong residents are on board the ship or undergoing treatment in Japanese hospitals. There are also 35 Italians, of which 25 are crew members, including the captain.

In China’s Hubei province, where the outbreak began in December, all vehicle traffic will be banned in another containment measure. It expands a vehicle ban in the provincial capital, Wuhan, where public transportation, trains and planes have been halted for weeks.

Exceptions were being made for vehicles involved in epidemic prevention and transporting daily necessities.

Hubei has built new hospitals with thousands of patient beds and China has sent thousands of military medical personnel to staff the new facilities and help the overburdened health care system.

Last Thursday, Hubei changed how it recognized COVID-19 cases, accepting a doctor’s diagnosis rather than waiting for confirmed laboratory test results, in order to treat patients faster. The tally spiked by more than 15,000 cases under the new method.

The government suspended all the India-bound air travel from China and has declared all visas 'invalid', on Monday, due to the rapid escalation of cases of novel coronavirus outbreak which originated in Wuhan.

"Embassy and our Consulates have been receiving several queries from Chinese citizens as well as other foreign nationals, who are based out of China or visited China in the last 2 weeks, as to whether they can use their valid single/multiple entry visas to travel to India," tweeted the Embassy of India in Beijing, China.

"It is clarified that existing visas are no longer valid. Intending visitors to India should contact the Indian Embassy in Beijing ([email protected]) or the Consulates in Shanghai ([email protected]) and Guangzhou ([email protected]) to apply afresh for an Indian visa," it said.

Further, regarding the validity of visas, the embassy said, "Indian Visa Application Centres (http://blsindia-china.com) in these cities may also be contacted in this regard. Visa Section of the Embassy/Consulates of India in China can be contacted to ascertain the validity of visa before undertaking any visit to India."

"All those who are already in India (with regular or e-visa) and had traveled from China after January 15 are requested to contact the hotline number of Ministry of Health and Family Welfare of Government of India (+91-11-23978046 and email: [email protected])," the embassy said.