World Bank sees outbreak taking a big toll on Asia's economy

World Bank is estimating that cornavirus outbreak will cause ecomic growth to slow significantly this year in China and or East Asian-Pacific countries, throwing millions into poverty.

Under a worse-case scenario, region could suffer its sharpest downturn since a devastating currency crisis more than two deces ago, bank said in an updated forecast released Monday.

bank's report projects that growth in region would slow to 2.1% this year from 5.8% in 2019 under a “baseline” forecast in which ecomic recovery takes hold this summer.

But under a worse case, in which verse effects of virus spillover into next year, region’s ecomy would contract 0.5%, bank estimates. That would represent weakest performance for region since 1997-98 Asian currency crisis, which plunged 40% of globe into recession.

More than 11 million people could fall into poverty in region, bank estimates in stark contrast to its earlier forecast that growth would be sufficient this year to lift 35 million people out of poverty.

A slowdown of size being projected by World Bank for such a critical part of global ecomy would have severe effects for rest of world. World Bank said it has t finished forecasts for or parts of world but last week,

In World Bank’s base case, China, world’s second largest ecomy, would see growth slow from 6.1% last year to 2.3% this year. In worse case scenario, growth in China would come to a near halt with a tiny 0.1% gain.

In worse case scenario where virus keeps disrupting activity for many more months, negative 0.5% drop for region would include ecomic declines of 2.3% in Indonesia, 4.6% for Malaysia and 5% for Thailand.

“In dition to bold national actions, deeper international cooperation is most effective vaccine against this virulent threat,” said Aitya Mattoo, chief ecomist for East Asia and Pacific at World Bank.

World Bank has pledged to provide $14 billion in financial support through a fast-track pack to strengn response of developing countries to virus and expects to deploy up to $160 billion over next 15 months to protect poor and vulnerable.

IMF has said it will commit if needed its full $1 trillion in lending resources to support nations hit by virus.