Corona targets health, wealth
As the world faces devastation due to the impact of coronavirus pandemic, the economies have clearly entered a recession. This means that all hopes to see a recovery will depend on how fast countries are able to cope up with the pandemic and how effectively the growing economies draw a revival plan.
The reassessment of the prospects for growth for 2020 and 2021 makes it clear that the world has entered a recession as bad or worse than in 2009. However, the key to recovery in 2021 depends only on how the international community succeeds in containing the virus everywhere and prevents liquidity problems from becoming a solvency issue.
The US is in recession, as is the rest of the advanced economies of the world. The same scenario is reflected in a big chunk of developed and emerging markets in developing economies. How severe will the recession prove will only depend on how effectively the countries respond to the containment by ensuring prevention of liquidity in the markets?
While containment of the pandemic will prove to be the main reason for the economy to stand still and get into a recession it is important that third world countries and the developing nations stress hard on zeroing on the spread of the coronavirus infections.
To avoid this from happening, many countries have taken far-reaching measures to address the health crisis and to cushion its impact on the economy, both on the monetary and on the fiscal side.
The reflections on the economic front stand the same for the developed nations as well as those who are termed as developing or emerging economies. India and more so Jammu and Kashmir fall in the category where the impact of the coronavirus spread will be enormous.
The results are there for everyone to see. It has been just a few days of the three week long lockdown announced in India and the economy has already spiraled into an unending confusion and chaos.
Though the coming few weeks will be the toughest phase for all of us to go through, we need meticulous planning by our financial institutions to help the economy cling to the track that it can withstand the onslaught.
In Jammu and Kashmir where the state owned Jammu and Kashmir bank is playing the main character on the economic platform, its conduct will determine how effectively we will be able to deal with the situation and cut down its impact on the already fragile economy of the region.
Though the bank has announced waiving of charges on digital transactions and non-maintenance of minimum balance on all accounts till June 30, the move is a goodwill gesture to the bank’s stakeholders especially its clients.
The banks reaction on the RBI’s decision to allow 3-month moratorium on the payment of installments of term loans and deferment of interest on working capital facilities will help its customer base to cope with the stress their ventures had to bear owing to the corona outbreak.