New Delhi: Former Reserve Bank of India (RBI) head Raghuram Rajan on Saturday said that at a time when containing coronavirus infection is posing a challenge to governments, the priority should be on “convincing companies and households that the virus is under control”. Also Read - RAI Writes to RBI, Seeks 4% Interest Subvention For 9 Months For Retail Sector
“People want to have a sense that there is a limit to the spread of this virus perhaps because of containment measures or because there is hope that some kind of viral solution can be found,” Bloomberg reported Rajan as saying. Also Read - ‘No Revenue Loss For NBFCs on 3-Month Moratorium on Loan Repayments'
“At this point I would say the best thing that governments can do is to really fight the epidemic rather than worry about stimulus measures that comes later,” Rajan added. Also Read - RBI EMI Moratorium: What Way it is Going to Benefit You | Here's Everything You need To Know
Rajan said that the spread of the virus is pushing the world economy to its worst performance. Notably, Bank of America Corp. economists have predicted a 2.8% global growth this year, the weakest since 2009.
“We have moved from extreme confidence in markets to extreme panic, all in the space of one week,” Bloomberg quoted Rajan as saying.
The virus outbreak will force companies to rethink supply chains and overseas production facilities, he asserted.
Meanwhile, the World Health Organization (WHO) has said that the coronavirus outbreak has reached a “decisive point” and has “pandemic potential” as the toll in China, the deadly disease’s country of origin, increased to 2,788 on Friday.