Countries across East Asia and the Pacific face recession as economies grind to a halt due to the coronavirus pandemic, according to the World Bank.
The World Bank said this in a report published on Tuesday.
It also warned that “significant economic pain seems unavoidable” across what was one of the world’s fastest-growing regions prior to the virus’ outbreak.
Though East Asia’s developing economies grew at an estimated 5.8 per cent in 2019, 2.8 per cent contraction looms this year should a sustained pandemic force lengthy lockdowns and constrict business worldwide.
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According to the bank, if the pandemic winds down soon and economies reboot quickly, relatively tepid growth of 1.3 per cent could be attained in a best-case scenario.
Growth in China, the world’s second-biggest economy, will range between 0.1 per cent and 2.3 per cent, weighing heavily on neighbouring countries that have become increasingly dependent on trade with and investment from Beijing.
The most vulnerable countries are marred by “poor disease control and prevention systems” while others that “rely heavily” on trade, tourism, and commodities will also face recession, the bank added.
Malaysia’s economy could shrink by 4.6 per cent, with Thailand and Indonesia looking at sharp drops of 5 per cent and 3.5 per cent respectively, it forecast.
Across Cambodia, Myanmar, and Vietnam – less-developed economies that have seen growth of around 7 per cent a year – a worst-case scenario will see growth slowdown of between 1 and 2 per cent.
The bank fears that nearly 24 million fewer people will escape poverty in the region this year than previously predicted, while the worst-case scenario could drive an extra 11 million across the region into poverty.
