Growth in East Asia and Pacific at lowest rate since 1967 amid COVID-19: World Bank

In a new Ecomic Update for East Asia and Pacific report, World Bank indicated that development in East Asia and Pacific nations, including China, will witness a slump in growth and development at lowest rate since 1967. Furr, World Bank Group’s 2020 Human Capital Index released this month that analyzed progress data across 174 countries and depicted sluggish progress in building human capital units. Warning about long-term threats to growth and rise in poverty, World banks’ report recommended East Asia and Pacific (EAP) governments to initiate fiscal and tre reforms and work on capacity for “smart containment” rar than ecomic shutdowns. 

“COVID-19 pandemic has delivered a triple shock to developing EAP,” report re, ding, while EAP region used a combination of stringent mobility restrictions, extensive testing-based strategies, and information programs to curb infections, efforts “curtailed ecomic activity”. 

World Bank warned that “COVID-19 shock” would t only trigger a spike in poverty but will create a class of "new poor”. growth in region in 2020, it warned, will only be 0.9 percent in 2020, lowest rate since 1967. “Prospects for region are brighter in 2021,” World Bank said. Furr, in report, bank warned countries, saying, if left unremedied, coronavirus pandemic will have a “lasting impact on inclusive longer-term growth by hurting investment, human capital, and productivity.”

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World Bank’s key recommendations

According to World Bank’s October 2020  From Containment to Recovery report, while EAP region is projected to contract by 3.5 percent, growth expected can be 7.9 percent in China and 5.1 percent in rest of region with World banks’ suggested recovery actions. In midst of a pandemic, poverty is expected to impact 38 million people in region for first time in 20 years (upper-middle-income poverty line of $5.50 a day). World Bank suggested EAP region soften tre-offs by using 'less ecomically disruptive' measures. It furr ds in report to enhance greater spending on relief without compromising public investments.

“Widening tax base with more progressive taxation of income and profits and less wasteful spending on regressive energy subsidies, in some cases over 2 percent of GDP, could make recovery more inclusive,” World Bank said in Ecomic Update for East Asia and Pacific report. 

Furr, World Bank warned that EAP governments will need to focus on hard-won reputations for financial prudence and resort to credible commitments to transparency and financial discipline that could help “mitigate risk of instability” in COVID-19 pandemic. World Bank suggested that region must also deepen tre reforms in protected services sectors such as finance, transport, and communications to relieve burden on or sectors and focus largely on vant of digital opportunities inste. 

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