COVID-19 and India's Macroeconomy: Pre-existing Conditions, Performance, and Prospects

Sajjid Z. Chinoy () and Toshi Jain ()
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Sajjid Z. Chinoy: J.P. Morgan
Toshi Jain: J.P. Morgan

India Policy Forum, 2022, vol. 18, issue 1, 87-138

Abstract: This paper seeks to undertake a holistic assessment of the pandemic’s impact on India’s macroeconomy. It does so by posing and answering four questions: First, what was the state of the economy coming into COVID-19, and what contributed to the pre-pandemic slowdown? This will have an important bearing on the post-pandemic outlook. Second, how complete is the economic recovery from COVID-19 expected to be and where are the most visible divergences? More generally, what are the steady-state macroeconomic implications of a K-shaped recovery? Third, where is growth likely to come from in the aftermath of the pandemic? Household Consumption? Private Investment? Government Capex? Exports? Which growth drivers have the potential to fire and which may be dormant for a while? Fourth, what do we know about potential growth coming into the pandemic? To what extent has the slowdown of total factor productivity (TFP) growth impacted potential growth since the global financial crisis? What are the macro determinants of TFP growth and what are the reform implications going forward?

Keywords: India; Growth; COVID; Consumption; Investment; Exports; Total Factor Productivity (search for similar items in EconPapers)
JEL-codes: D14 D15 E21 E22 E24 E62 F10 (search for similar items in EconPapers)
Date: 2022
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