- Indian economic recovery from covid-19 could take 3 years
- Indian economic reopening mapped out despite covid-19 cases reaching 200,000
- < 2 million US initial jobless claims expected
- At 12:15 UTC, USD/INR is trading +0.3% at 75.52
The Indian Rupee is adding to losses versus the US Dollar from the previous session, whilst paring from earlier this week. The Indian Rupee settled on Wednesday +0.3% at 75.32.
At 11:15 UTC, USD/INR is trading +0.3% at 75.52. This is towards the upper end of the daily traded range of 75.32 – 75.64.
Concerns are growing over the long road that India faces to drag itself out of the coronavirus crisis. Pre-covid-19, India was experiencing world beating economic growth, however, months of strict lockdown have left businesses collapsing and unemployment soaring.
Analysts expect India’s economy to contract this fiscal year, possibly by as much as -5%. However, fears over how long the recovery could take are now starting to set in. Domestic rating agency Crisil, the local arm of international rating agency S&P, believes that the Indian economy will take over three years to reach pre-coronavirus crisis levels.
A Bloomberg poll of analysts was more optimistic with a GDP contraction of -1.9% expected this year and a 7.1% rebound in the coming fiscal year. However, even economic growth of 7.1% is insufficient to create the necessary jobs for the 10-12 million Indians seeking employment each year.
As fears over the impact of the economic hit from coronavirus rise, New Delhi has mapped a route for the phased reopening of the economy, despite the number of covid-19 cases reaching 200,000.
The US Dollar is gaining altitude across the board on Thursday as the recent risk rally eases and as investors look ahead to the release of key US jobs data.
Analysts are expecting the number of Americans filing for unemployment benefits to drop below 2 million last week, for the first time since mid March. However, the rate remains extremely high as firms adjust to the changes that coronavirus has brought with it.
Whilst the week jobless claims report is expected to show that the worst is behind the US, it will also show that unemployment levels in May were around 20%, a level last seen in the Great Depression of 1930.
