Q1 lesson: This time it’s better – Economic recovery from pandemic much more robust than that after global financial crisis

Exactly a year back, we had predicted an imminent V-shaped recovery in GDP growth after its sharp decline. At that time, most doubted the prediction. A former finance minister wrote: “In a barren desert without any sign of water, the finance minister and the chief economic advisor saw green shoots!”

His lack of nuanced understanding was of course clear from the statement: “About one quarter of the gross domestic output as on June 30, 2019, has been wiped out in the last 12 months.” Unlike the level of water in a tank, GDP is not a measure that captures the level of stock.  Instead, like the amount of water flowing over a period of time, GDP measures the flow of economic activities in a period of time.

Read full opinion on TOI+



Views expressed above are the author’s own.



Source link