WASHINGTON, DC: An empty downtown street is seen near the World Bank in Washington, DC. The coronavirus pandemic is expected to sharply slow growth in developing economies in East Asia and the Pacific as well as China, the World Bank said in an update on Monday. –AFP

WASHINGTON: The coronavirus pandemic is expected to sharply slow growth in developing economies in East Asia and the Pacific as well as China, the World Bank said in an economic update on Monday. The bank said precise growth forecasts were difficult, given the rapidly changing situation, but its baseline now called for growth in developing economies in the region to slow to 2.1 percent in 2020, and to -0.5 percent in a lower-case scenario, compared to estimated growth of 5.8 percent in 2019.

In China, where the coronavirus outbreak originated in late December, growth was projected to slow to 2.3 percent in the baseline scenario, or as low as 0.1 percent in the lower-case scenario, compared to growth of 6.1 percent in 2019. The region faced an unusual combination of “disruptive and mutually reinforcing events,” the report said. “Significant economic pain seems unavoidable in all countries.”

Countries in the region should invest in healthcare capacity and take targeted fiscal measures, such as providing subsidies for sick pay and healthcare, to mitigate some of the immediate impacts of the pandemic, the World Bank said. “Containment of the pandemic would allow for a sustained recovery in the region, although risks to the outlook from financial market stress would remain high,” it said.

The financial shock of the pandemic was also expected to have a serious impact on poverty, defined as income of $5.50 a day, the bank said. The baseline scenario called for nearly 24 million fewer people to escape poverty across the region in 2020 due to the pandemic. If the economic situation deteriorated even further, poverty could increase by about 11 million people.

Prior projections estimated that nearly 35 million people would escape poverty in the region in 2020, including over 25 million in China alone, the bank said. In addition to targeted fiscal measures, countries should look to deeper international cooperation and new cross-border public-private partnerships to ramp up the production and supply of key medical supplies and services, and ensure financial stability in the aftermath of the crisis, it said.

Countries should also ease credit to help households smooth their consumption and help firms survive the immediate shock of the outbreak. “The good news is that the region has strengths it can tap, but countries will have to act fast and at a scale not previously imagined,” said Victoria Kwakwa, vice president for East Asia and the Pacific at the World Bank.

The World Bank also urged the Group of 20 major economies (G20) to refrain from imposing new export restrictions on critical medical supplies, food or other key products as the world battles the devastating coronavirus pandemic. In a statement to a video conference of G20 trade ministers, a senior World Bank official said the pandemic was projected to plunge the global economy into a deep recession, disrupting supply chains and hitting critical trade nodes.

To mitigate the impact on poor countries at risk due to the limited supply of medical goods, the global lender urged G20 countries to eliminate or reduce tariffs on imports of key products needed to fight the pandemic, and lower or temporarily suspend tariffs and export taxes on food and other basic goods.

“Continued international cooperation to maintain an open and rules-based trading system will be essential for recovery and sustainable and inclusive development,” Mari Pangestu, the World Bank’s managing director for development policy and partnerships, told the ministers.

“Going it alone is not an option. We will come out much stronger if we all work together with a clear focus on the future,” she said, according to a text of her remarks. Trade ministers ended the meeting with a pledge to work to keep markets open and ensure the continued flow of medical supplies, but stopped short of calling for an end to export bans that many countries, including G20 members France, Germany and India, have enacted on drugs and medical supplies.

The Trump administration has waived some tariffs in place on Chinese-made medical supplies, but has drawn fire from some industry groups for its work on new rules that would expand “Buy America” mandates to the medical equipment and pharmaceutical sectors. Pangestu said the World Bank Group was especially concerned about the impact of the pandemic on emerging markets and developing countries, noting that the global market for 17 key products needed to fight the disease were highly concentrated.

WASHINGTON: The coronavirus pandemic is expected to sharply slow growth in developing economies in East Asia and the Pacific as well as China, the World Bank said in an economic update on Monday. The bank said precise growth forecasts were difficult, given the rapidly changing situation, but its baseline now called for growth in developing economies in the region to slow to 2.1 percent in 2020, and to -0.5 percent in a lower-case scenario, compared to estimated growth of 5.8 percent in 2019.

In China, where the coronavirus outbreak originated in late December, growth was projected to slow to 2.3 percent in the baseline scenario, or as low as 0.1 percent in the lower-case scenario, compared to growth of 6.1 percent in 2019. The region faced an unusual combination of “disruptive and mutually reinforcing events,” the report said. “Significant economic pain seems unavoidable in all countries.”

Countries in the region should invest in healthcare capacity and take targeted fiscal measures, such as providing subsidies for sick pay and healthcare, to mitigate some of the immediate impacts of the pandemic, the World Bank said. “Containment of the pandemic would allow for a sustained recovery in the region, although risks to the outlook from financial market stress would remain high,” it said.

The financial shock of the pandemic was also expected to have a serious impact on poverty, defined as income of $5.50 a day, the bank said. The baseline scenario called for nearly 24 million fewer people to escape poverty across the region in 2020 due to the pandemic. If the economic situation deteriorated even further, poverty could increase by about 11 million people.

Prior projections estimated that nearly 35 million people would escape poverty in the region in 2020, including over 25 million in China alone, the bank said. In addition to targeted fiscal measures, countries should look to deeper international cooperation and new cross-border public-private partnerships to ramp up the production and supply of key medical supplies and services, and ensure financial stability in the aftermath of the crisis, it said.

Countries should also ease credit to help households smooth their consumption and help firms survive the immediate shock of the outbreak. “The good news is that the region has strengths it can tap, but countries will have to act fast and at a scale not previously imagined,” said Victoria Kwakwa, vice president for East Asia and the Pacific at the World Bank.

The World Bank also urged the Group of 20 major economies (G20) to refrain from imposing new export restrictions on critical medical supplies, food or other key products as the world battles the devastating coronavirus pandemic. In a statement to a video conference of G20 trade ministers, a senior World Bank official said the pandemic was projected to plunge the global economy into a deep recession, disrupting supply chains and hitting critical trade nodes.

To mitigate the impact on poor countries at risk due to the limited supply of medical goods, the global lender urged G20 countries to eliminate or reduce tariffs on imports of key products needed to fight the pandemic, and lower or temporarily suspend tariffs and export taxes on food and other basic goods.

“Continued international cooperation to maintain an open and rules-based trading system will be essential for recovery and sustainable and inclusive development,” Mari Pangestu, the World Bank’s managing director for development policy and partnerships, told the ministers.

“Going it alone is not an option. We will come out much stronger if we all work together with a clear focus on the future,” she said, according to a text of her remarks. Trade ministers ended the meeting with a pledge to work to keep markets open and ensure the continued flow of medical supplies, but stopped short of calling for an end to export bans that many countries, including G20 members France, Germany and India, have enacted on drugs and medical supplies.

The Trump administration has waived some tariffs in place on Chinese-made medical supplies, but has drawn fire from some industry groups for its work on new rules that would expand “Buy America” mandates to the medical equipment and pharmaceutical sectors. Pangestu said the World Bank Group was especially concerned about the impact of the pandemic on emerging markets and developing countries, noting that the global market for 17 key products needed to fight the disease were highly concentrated.

“The poorest countries are extremely vulnerable to policies in exporting countries, including trade restrictions on medical supplies – on top of the risk of being priced out of the markets by richer countries,” she said. Tariffs on imports of key COVID-19 products were below 4 percent in advanced economies, above 8 percent in developing economies and exceeded 11 percent in least developed economies, she noted. – Reuters

“The poorest countries are extremely vulnerable to policies in exporting countries, including trade restrictions on medical supplies – on top of the risk of being priced out of the markets by richer countries,” she said. Tariffs on imports of key COVID-19 products were below 4 percent in advanced economies, above 8 percent in developing economies and exceeded 11 percent in least developed economies, she noted. – Reuters