New Delhi: The lockdowns necessitated to tackle the spread of the novel coronavirus spell uncertainty for global economic growth, the Reserve Bank of India said in its monetary policy report, released on April 9.Also Read - Repo Rate, Inflation: RBI to Release Monetary Policy Today | Here's What to Expect From Central Bank

“The global macroeconomic outlook is overcast with the COVID-19 pandemic, with massive dislocations in global production, supply chains, trade and tourism. Financial markets across the world are experiencing extreme volatility; global commodity prices, especially of crude oil, have declined sharply. COVID-19 would impact economic activity in India directly due to lockdowns, and through second-round effects operating through global trade and growth. The impact of COVID-19 on inflation is ambiguous, with a possible decline in food prices likely to be offset by potential cost-push increases in prices of non-food items due to supply disruptions,” it said. Also Read - Madhya Pradesh: Two Foreign Return People Test Covid Positive; Sample Sent For Genome Sequencing

Prior to the outbreak of COVID-19, the outlook for growth for 2020-21 was looking up, the report said. “The COVID-19 pandemic has drastically altered this outlook. The global economy is expected to slump into recession in 2020, as post-COVID projections indicate. The sharp reduction in international crude oil prices, if sustained, could improve the country’s terms of trade, but the gain from this channel is not expected to offset the drag from the shutdown and loss of external demand,” it said. Also Read - Flying to UK? Country Tightens Travel Rules As Omicron Looms | Deets Inside

The actual outturn would depend upon the speed with which the outbreak is contained and economic activity returns to normalcy. “Significant monetary and liquidity measures taken by the Reserve Bank and fiscal measures by the government would mitigate the adverse impact on domestic demand and help spur economic activity once normalcy is restored. Risks around the inflation projections appear balanced at this juncture and the tentative outlook is benign relative to recent history. But COVID-19 hangs over the future, like a spectre.