ADB says economies with domestic outbreaks and strict lockdowns are hardest hit
Asian Development Bank sees COVOID-19 to bring global losses from US$5.8 to US$8.8 trillion
MANILA – Asian Development Bank sees the novel coronavirus disease (COVID-19) pandemic will trigger global losses from US$5.8 to US$8.8 trillion which is 6.4% to 9.7% of global gross domestic product (GDP), should there be failure to formulate appropriate policy response.
“This is more than double ADB’s estimate in April 2020,” said ADB’s chief economist Yasuyuki Sawada in a short video uploaded this morning.
He said economies with domestic outbreaks and strict lockdowns will be hardest hit as domestic demand weakens sharply. He explained more open economies, and those that are “tourism- or commodity-dependent, will also suffer from the collapse in global demand.”
The Bank’s chief economist said containing the pandemic is key to reducing the economic cost with sufficient testing, tracing, and isolation, effective social distancing, as well as securing protective and medical equipment are all essential elements. He underscored the importance of government support for struggling families and businesses to cushion the adverse impacts of the pandemic and forestall long-term consequences for growth and development.
“ADB’s analysis finds that government policy responses will soften COVID-19’s global impact by 30-40%, reducing losses to US$4.1 to US$5.4 trillion, or by 4.5% to 5.9% of global GDP,” the statement disclosed.
The chief economist believes rapid and effective containment will allow for a faster recovery and should require adequate testing, tracing and isolation of identified COVID-19 positive cases. It is also critical to identify industries and occupations in terms of essentiality and economic importance, as well as their ability to operate safely with appropriate social distancing.
The ADB said governments “should re-open the economy sequentially, balancing heath risks and economic considerations, and being ready to tighten if outbreaks reoccur.”
Economist Sawada said it is imperative to have adequate data and information for governments to chart their respective programs. (Melo M. Acuña)
(Screen grab from ADB Website)