The coronavirus pandemic could cost the global economy $ 4.1 trillion as it ravages the U.S., Europe and other large economies, the Asian Development Bank warned on Friday. equates to almost five percent of world production based on a series of scenarios, but the Lender said that the losses from “the worst pandemic of a century” could be higher.
“The estimated impact could be underestimated, as additional channels such as … possible social and financial crises and long-term effects on health care and education are excluded from the analysis”, said the AfDB.
The Manila-based bank said a shorter containment period could cut losses to $ 2 trillion.
The crisis has turned the stock markets as traders worry about the long-term impact on the global economy, although governments and central banks have stepped in to ease the pain, pledging more than $ 5 trillion stimulus and easing monetary policy.
Officially reported Covid-19 The world crossed the million mark on Thursday with tens of thousands of deaths, as some warn that the number will continue to soar as the disease spreads rapidly.
With billions of people stranded and economies stalled, the AfDB said Asia is expected to grow 2.2% this year, its slowest pace since expanding 1.7% during the Asian financial crisis in 1998.
“No one can say how far the COVID-19 pandemic can spread and containment may take longer than expected,” said AfDB chief economist Yasuyuki Sawada.
“The possibility of severe financial turbulence and financial crises cannot be ruled out,” he added.
forecasts assume that the coronavirus epidemic will be contained this year and a return to normalcy in 2021.
However, there is still the potential for additional outbreaks and the severity of the pandemic remains unclear.
“The results may be worse than expected and growth may not recover as quickly,” said the bank.
Growth in China, the region’s largest economy, could slow to 2.3% this year, from 6.1% in 2019, before rebounding in 2021.
“The epidemic became a demand shock while people stayed at home. It became a supply shock as businesses suffered from shortages of labor … and materials while chains were flickering, “said the AfDB.
Almost five percent, or $ 628 billion, of China’s GDP could be lost.