Pandemic will cause an unprecedented economic downturn in Asia since 1967

“The COVID-19 pandemic has inflicted multiple shocks on the EAP region: the disease, domestic economic shutdowns, and reverberations from the rest of the world,”-says the World Bank in its Economic Update on East Asia and the Pacific.

The COVID-19 pandemic amalgamates the worst elements of other crises (wars, natural disasters, international financial meltdowns): “a simultaneous supply and demand shock; domestic, regional, and global in scope,”-says the bank in its statement.

“COVID-19 is not only hitting the poor the hardest, it is creating ‘new poor’,”- asserts the Vice President for East Asia and the Pacific as the World Bank, Victoria KwaKwa.

The World Bank stated that the region might face the lowest growth-rate since 1967, only 0.9%. Based on the past experience and latest GDP forecasts, developing EAP might have to confront increase in poverty from 33 million to 38 million people, for the first time in 20 years.

China is also affected by the crises. While the largest developing country was forecast to grow by 2.0 percent in this year, pushed by government spending, low rate of coronavirus cases since March, strong exports and slow domestic consumption, the rest of the East Asia and the Pacific is estimated to contract by 3.5 percent.

Countries in this region are advised to handle the crises through conducting fiscal reforms, boosting social protection programs that can encourage workers, who were heavily affected by the pandemic crises.

If germane actions are not taken by the countries, the pandemic could affect regional growth over the next decade, declining by 1 percentage point per year. Because of inadequate access to education, healthcare and job opportunities, poor households will have to face harsh repercussions.