Mumbai, March 12: With the coronavirus pandemic impacting the global economy, chief India economist at JPMorgan -- Sajjid Chinoy -- that its effect on Indian exports and tourism could be 70-80 basis points (bps) at a minimum. Chinoy also stated that due to the COVID-19 effect, the global growth may dip to -1 percent and economic damage around the world is going to be much more severe than people believe.

Expressing his opinion on the current economic situatiion due to the coronavirus pandemic, Sajjid Chinoy said, as quoted by CNBC TV18, "The impact to India if you combine exports and tourism could be 70-80 basis points (bps) at a minimum. This is assuming the virus doesn’t proliferate domestically but the good news for India is that we are a very large importer of oil and the fact that oil has come from USD 65 per barrel to USD 35 per barrel is a very large positive in terms of trade shocks, almost 1.3 percent of GDP even accounting for the fact that remittances from the Middle East may be lower. So this mitigates a lot of the macro headwinds." Sensex Records Worst Fall Since 2008, Tanks 2,919 Points, Nifty at 9,590, Dalal Street Witnesses Bloodbath Due to Coronavirus Pandemic.

Stating the condition is more serious than people are thinking, Chinoy said that with each passing 24 hours the economic damage is surging across the globe, which is having an impact in India too. He also claimed that COVID-19 is playing an adverse effect in the supply shock that emanates from China and the third is this positive supply shock from oil. Chinoy beleived the economic demand destruction and economic growth could be materially lower in the coming days in India, if the government imposes social distancing that is necessary that other countries are doing to prevent the exponential spread.

Adding more, the JPMorgan economist said that Reserve Bank of India's entire inflation forecast should be mark-to-market like to deal with the upcoming crisis. He said, "The RBI’s own sensitivities are every USD 10 per barrel move in crude pushes consumer price index (CPI) down by 30 bps. So if this sustains, that will create a huge downward bias plus there will be growth markdowns, both for India and globally. So the future inflation forecast clearly opens up some space for easing. We expect there will be a 25-40 bps cut either at the April review or before that."

Meanwhile, reports arrived that India is facing a sharp decline in government revenues and economic growth for at least two quarters. Though this situation has evolved due to the the coronavirus and a fall in investor sentiment impacts privatisation plans, the Union government is still sticking to the target of achieving 6-6.5 percent in the next financial year beginning April. Coronavirus Outbreak: Donald Trump Says 'US Will Suspend All Travel From Europe to US For Next 30 Days' to Control the Spread of COVID-19.

With the Sensex recorded the worst fall since 2008, by ending almost 3,000 points at 32,778 down on Thursday, investers claim that Dalal Street mayhem wiped off wealth worth over Rs 10 lakh crore today. Even Nifty, on the other hand, ended the Thursday session at 9,590, down 868 points (8.30 percent). Nifty50 index breached the psychological mark of 10,000 today for the first time since March 26, 2018. Earlier, the markets opened in the red and continued to tread in the negative terrain tracking weak global markets which were rattled after the World Health Organisation declared the novel coronavirus outbreak a "pandemic".

Informing about the COVID-19 cases, Indian government on Thursday said that 73 positive cases have been reported, which includes 56 Indians and 17 foreigners. The government informed that 52 testing facilities are located across the country along with 56 sample collection centers.

(The above story first appeared on LatestLY on Mar 12, 2020 04:45 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).