The International Monetary Fund on Thursday said the Asia Pacific region is likely to not register any economic growth for the first time in 60 years due to the coronavirus outbreak. Globally, Covid-19 has infected over 20.62 lakh people and caused over 1.36 lakh deaths, according to the Johns Hopkins University tracker.
“This is a crisis like no other,” Chang Yong Rhee, director of the Asia and Pacific Department at the IMF said. “It is worse than the Global Financial Crisis, and Asia is not immune. While there is huge uncertainty about 2020 growth prospects, and even more so about the 2021 outlook, the impact of the coronavirus on the region will – across the board – be severe and unprecedented. Growth in Asia is expected to stall at zero percent in 2020.”
The Washington-based organisation said Asia is expected to fare better than other regions suffering economic contractions, but the projection is worse than the 4.7% average growth rates throughout the global financial crisis, and the 1.3% increase during the Asian financial crisis in 1997.
IMF urged policymakers to offer targeted support to households and firms affected by travel bans, social distancing policies and other measures aimed at containing the pandemic.“This is not a time for business as usual,” Rhee said. “Asian countries need to use all policy instruments in their toolkits.”
“Prospects for 2021, while highly uncertain, are for strong growth,” he added. “If containment measures work, and with substantial policy stimulus to reduce ‘scarring’ growth in Asia is expected to rebound strongly – more so than during the Global Financial Crisis.”
Rhee said the Asia Pacific region has been experiencing different stages of the coronavirus pandemic. “China’s economy is beginning to get back to work, other economies are imposing tighter lockdowns, and some are experiencing a second wave of virus infections,” he added. “Much depends on the spread of the virus and on how policies respond.”
Meanwhile, the IMF expressed its support for India’s “proactive” decision to implement a nationwide lockdown to check the spread of coronavirus. “India entered the pandemic turmoil in the midst of a credit crunch-induced slowdown and its recovery prospect becomes more uncertain,” Rhee said. “Despite the economic slowdown, the government implemented a nationwide lockdown and we support India’s proactive decision.”
On Tuesday, the fund slashed its growth projection for India to 1.9% from the earlier estimated 5.8%for the financial year 2020-2021 as the intensifying coronavirus pandemic continues to crush the global economy. With a subdued forecast, India is likely to record its worst growth performance since liberalisation in 1991, the IMF had said in its latest edition of the World Economy report. However, the fund added that only India and China will see positive growth in 2020.