COVID-19 pandemic to Slowdown Asian Economic Growth: World Bank
As per the World Bank’s economic update, the developing economies of Asia are to be badly affected by Coronavirus Pandemic. The ongoing health crisis will lead to the slow growth in East Asian economies and the Pacific as well as China.
The World Bank noted that there was difficulty in predicting the actual growth forecast due to changing situations but its baseline that defines the growth in developing economies has slowed to 2.1 percent in 2020 and it will go down further to -0.5 percent if the scenario worsens. The estimated growth in 2019 was 5.8 percent.
The World Bank report further stated that the unusual combination of disruptive events in the entire region will make the economic pain unavoidable.
COVID-19 Impact on China’s Economy
China, one of the strongest economies in the world, saw the origin of the Covid-19 outbreak in late December. At that time, the growth of the Chinese economy in a baseline scenario was estimated to slow down to 2.3 percent or to go to 0.1 percent in a lower case scenario. This was in comparison to the growth of 6.1 percent in 2019.
Financial Shock on Poverty
COVID-19 pandemic will give a serious economic shock to poverty, as per a statement by the World Bank. The shock is defined as an income of $5.50 dollar per day. In a defined baseline scenario, in 2020 across the region, nearly 24 million fewer people are to escape poverty due to the COVID-19 pandemic. But seeing the deteriorating economic conditions, poverty will increase by about 11 million people.
In a prior projection, the bank stated there was an estimation that nearly 35 million people will escape poverty in 2020, which includes over 25 million in China alone.
Following are a few suggestions by the World Bank to curb the economic crisis:
- Countries must invest in health care along with taking targeted fiscal measures such as sick pay subsidies and healthcare. This will control some of the immediate effects of the pandemic.
- Countries must focus on deepening international cooperation and start cross border partnerships. It will benefit the production of medical supplies and will give financial stability.
- Ease household credit to smooth the consumption. It will also help firms in surviving the immediate shock after the COVID-19 outbreak.
- To strengthen the Asian region, the countries must act fast at a scale that is not previously imagined.