The IMF has already warned that the world is in the midst of a global recession amid the coronavirus pandemic. The World Bank has now released a gloomy report stating that South Asia, one of the most densely-populated region with 1.8 billion inhabitants, is on course for the worst economic performance in over four decades.
The economic effects of the pandemic and the lockdown can already be witnessed as business activity and daily routine has come to a standstill. Decades of progress can be wiped out as workers continue to lose jobs and millions are at risk of poverty. The report states that South Asia finds itself in the “perfect storm” of adverse effects as supply chains have been disrupted and investor sentiments have dropped.
The global lender forecast growth or the entire region, which comprises of sight countries, between 1.8pct to 2.8pct, well below the 6.3pct speculated six months ago. The report warns that in the case of a worst case scenario and prolonged lockdown, there will be negative growth this year which could linger on till 2021. It states that the priority for all regional governments in to protect the poorest who face considerable health and economic outcomes.
There is further bad news as the report names Pakistan among of the nations which may fall into a “deep recession.” The GDP growth in Pakistan could shrink by 2.2pct as the immediate challenge for the government would be to contain the spread of the virus, minimize economic losses and protecting the poorest. This is exactly what the government has been doing in dealing with the pandemic but would be insufficient to escape from the fallout.
It further states that pandemic will hit hard low-income people particularly informal workers who have no access to healthcare of social safety nets. This will reinforce inequality in South Asia as many people will fall into poverty and threaten food security along with disrupting long-term growth.
If the economic fallout was not enough, it is also expected that South Asia could become the next coronavirus hotspot. The region has not reported many cases as compared to the developed countries but things might change. With many countries still struggling to provide basic healthcare and lax enforcement of safety precautions, it is likely that the region will among the worst affected. While measures are being taken, it is certain that it would be a long and tough year ahead for the region and the world.
ADVERTISEMENT
