Economy

Covid-19: Global GDP may lose $77-347 b; Asia to take massive hit, says ADB

Press Trust of India New Delhi | Updated on March 06, 2020 Published on March 06, 2020

Workers wearing protective suits talk outside a clothing store on Munjeong-dong Rodeo Street in the Songpa district of Seoul, South Korea.   -  Bloomberg

The coronavirus outbreak has the potential to significantly harm the Asian economies, and the global economy may suffer losses of $77-347 billion, Asian Development Bank (ADB) said on Friday.

The virus outbreak may impact developing Asian economies through numerous channels, including sharp declines in domestic demand, lower tourism and business travel, trade and production linkages, supply disruptions, and health effects, ADB said, citing a new analysis done by it.

“The magnitude of the economic losses will depend on how the outbreak evolves, which remains highly uncertain.

The range of scenarios explored in the analysis suggests a global impact in the range of $77-347 billion, or 0.1-0.4 per cent of global gross domestic product (GDP), it said.

“In a moderate scenario, where precautionary behaviours and restrictions such as travel bans start easing three months after the outbreak intensified and restrictions were imposed in late January, global losses could reach $156 billion, or 0.2 per cent of global GDP,” as per ADB’s analysis.

China would account for $103 billion of those losses, or 0.8 per cent of its GDP. The rest of developing Asia would lose $22 billion, or 0.2 per cent of its GDP.

“There are many uncertainties about COVID-19, including its economic impact,” said ADB Chief Economist Yasuyuki Sawada.

“This requires the use of multiple scenarios to provide a clearer picture of potential losses. We hope this analysis can support governments as they prepare clear and decisive responses to mitigate the human and economic impacts of this outbreak,” Sawada said.

The Manila-headquartered multi-lateral funding agency had in February announced $4 million assistance for Asian countries to fight the deadly virus, that has claimed over 3,000 lives globally.

The ADB analysis takes into account various scenarios considered, estimated impact on individual developing Asian economies, the sectors within these economies including a hypothetical “worst case” scenario for a given economy in the event of a significant outbreak.

ADB said the analysis is meant to provide guidance for governments as they consider appropriate responses.

On February 7, it had announced $2 million support to enhance detection, prevention, and response in China and the Greater Mekong Subregion followed by another $2 million on February 26 to support response in all its developing members.

Published on March 06, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.