WB projects negative growth, millions pushed into poverty if COVID-19 persists

• Growth in China is projected to decline to 2.3pc in the best-case scenario and 0.1pc in the worst-case scenario in 2020, from 6.1pc in 2019.
• Whereas, growth in EAP excluding China is projected to slow from 4.7pc in 2019 to 1.3pc in the best-case scenario and negative 2.9pc in the worst-case scenario in 2020

The World Bank has projected that the ongoing coronavirus pandemic would take a great toll on the economies of China and other Southeast Asian countries.

The bank in its latest report titled ‘World Bank East Asia and Pacific Economic Update April 2020,’ has projected growth in the developing East Asia Pacific (EAP) region to slow to 2.1 percent from an estimated 5.8 percent in 2019, in a scenario if the economy recovers from the pandemic. However, in the worst-case scenario the growth will be negative 0.5pc if the pandemic continues in 2021

Meanwhile, growth in China is projected to decline to 2.3pc in the best-case scenario and 0.1pc in the worst-case scenario in 2020, from 6.1pc in 2019.

Whereas, growth in EAP excluding China is projected to slow from 4.7pc in 2019 to 1.3pc in the best-case scenario and negative 2.9pc in the worst-case scenario in 2020, and is projected to rebound gradually in 2021 as the effects of the virus dissipate.

“Containment of the pandemic would allow recovery, but the risk of durable financial stress is high even beyond 2020. Most vulnerable are countries that have poor disease control and prevention systems; that rely heavily on trade, tourism, and commodities; that are heavily indebted; and that rely on volatile financial flows,” read the report.

The report stated that a COVID-19 shock will also have a serious impact on poverty reduction across the region.

The report estimates that under the best-case growth scenario, 24 million fewer people will escape poverty across the region in 2020 than would have in the absence of the pandemic. However, if the economic situation were to deteriorate further, and the worst-case scenario prevails, then poverty is estimated to increase by about 11 million people.

The report said that prior projections estimated that 35 million people would escape poverty in the region in 2020, including over 25 million in China alone.