Coronavirus to have significant economic impact on developing Asian countries: ADB
MANILA: A new study released by the The Asian Development Bank (ADB) on Friday suggests that coronavirus will have a significant impact on developing Asian economies through numerous channels.
Sharp declines in domestic demand, lower tourism and business travel, trade and production linkages, supply disruptions, and health effects are expected — depending on how the virus evolves, a press release from the ADB said.
According to the ADB, the magnitude of the economic losses will depend on how the outbreak evolves, which remains highly uncertain.
The range of scenarios explored in the analysis suggests a global impact in the range of $77 billion to $347 billion, or 0.1 per cent to 0.4pc of global gross domestic product (GDP).
The ADB suggests that in a moderate scenario, where precautionary behaviours and restrictions such as travel bans start easing 3 months after the outbreak intensified and restrictions were imposed in late January, global losses could reach $156 billion, or 0.2pc of global GDP.
China would account for $103 billion of those losses — or 0.8 of its GDP. The rest of developing Asia would lose $22 billion, or 0.2pc of its GDP.
“There are many uncertainties about COVID-19, including its economic impact,” said ADB Chief Economist Yasuyuki Sawada.
“This requires the use of multiple scenarios to provide a clearer picture of potential losses. We hope this analysis can support governments as they prepare clear and decisive responses to mitigate the human and economic impacts of this outbreak.”
The analysis, The Economic Impact of the COVID-19 Outbreak on Developing Asia, presents full details on the scenarios considered.
It also presents estimated impact on individual developing Asian economies—and on sectors within these economies—including under a hypothetical “worst case” scenario for a given economy in the event of a significant outbreak.
These should not be interpreted as predictions that an outbreak will occur but are meant to provide guidance for governments as they consider appropriate responses.
All scenarios and assessments are available on ADB’s website and will be updated as the situation evolves. – AFP