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‘Significant economic pain unavoidable in Asia’: World Bank on coronavirus pandemic

The bank said precise growth forecasts were difficult, given the rapidly changing situation, but its baseline now called for growth in developing economies in the region to slow to 2.1% in 2020, and to -0.5% in a lower-case scenario, compared to estimated growth of 5.8% in 2019.

By: Reuters | Published: March 31, 2020 8:28:59 am
Coronavirus, world bank on Coronavirus, Coronavirus impact on economy, Coronavirus impact on china economy, Coronavirus impact on china growth, Coronavirus impact on india economy, world bank on covid-19 In this photo released by Xinhua News Agency, women wearing protective masks to prevent the new coronavirus outbreak walk on a re-opened commercial street in Wuhan in central China’s Hubei province (AP)

The coronavirus pandemic is expected to sharply slow growth in developing economies in East Asia and the Pacific as well as China, the World Bank said in an economic update on Monday.

The bank said precise growth forecasts were difficult, given the rapidly changing situation, but its baseline now called for growth in developing economies in the region to slow to 2.1% in 2020, and to -0.5% in a lower-case scenario, compared to estimated growth of 5.8% in 2019.

In China, where the coronavirus outbreak originated in late December, growth was projected to slow to 2.3% in the baseline scenario, or as low as 0.1% in the lower-case scenario, compared to growth of 6.1% in 2019.

The region faced an unusual combination of “disruptive and mutually reinforcing events,” the report said. “Significant economic pain seems unavoidable in all countries.”

Countries in the region should invest in healthcare capacity and take targeted fiscal measures, such as providing subsidies for sick pay and healthcare, to mitigate some of the immediate impacts of the pandemic, the World Bank said.

READ | Initial focus on China, Europe as coronavirus sneaked in through Gulf

Civic officials in Chennai carry out a door-to-door drive in the residential areas where patients have tested positive for coronavirus. (Express Photo)

“Containment of the pandemic would allow for a sustained recovery in the region, although risks to the outlook from financial market stress would remain high,” it said.

The financial shock of the pandemic was also expected to have a serious impact on poverty, defined as income of $5.50 a day, the bank said. The baseline scenario called for nearly 24 million fewer people to escape poverty across the region in 2020 due to the pandemic. If the economic situation deteriorated even further, poverty could increase by about 11 million people.

Prior projections estimated that nearly 35 million people would escape poverty in the region in 2020, including over 25 million in China alone, the bank said.

In addition to targeted fiscal measures, countries should look to deeper international cooperation and new cross-border public-private partnerships to ramp up the production and supply of key medical supplies and services, and ensure financial stability in the aftermath of the crisis, it said.

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coronavirus gulf countries, coronavirus in Saudi Arabia, coronavirus world updates, coronavirus India news updates Prior projections estimated that nearly 35 million people would escape poverty in the region in 2020, including over 25 million in China alone, the bank said.

Countries should also ease credit to help households smooth their consumption and help firms survive the immediate shock of the outbreak.

“The good news is that the region has strengths it can tap, but countries will have to act fast and at a scale not previously imagined,” said Victoria Kwakwa, vice president for East Asia and the Pacific at the World Bank.

Here’s a quick Coronavirus guide from Express Explained to keep you updated: What can cause a COVID-19 patient to relapse after recovery? | COVID-19 lockdown has cleaned up the air, but this may not be good news. Here’s why | Can alternative medicine work against the coronavirus? | A five-minute test for COVID-19 has been readied, India may get it too | How India is building up defence during lockdown | Why only a fraction of those with coronavirus suffer acutely | How do healthcare workers protect themselves from getting infected? | What does it take to set up isolation wards?

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