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COVID-19 may trigger global poverty – World Bank



… 11 m Asians worse-hit  

The economic fallout from the coronavirus pandemic could drive an additional 11 million people into poverty in East Asia and the Pacific unless “urgent action” is taken.

World Bank gave the warning yesterday in the worse-case scenario outlined by it.

According to the global finance body, the region could suffer its sharpest downturn in more than two decades, plunging much of Asia into a prolonged recession.

The bank’s baseline forecast projects that regional growth could slow to 2.1% in 2020, compared to estimated growth of 5.8% in 2019. However, under its worst case projection, the region’s economy could contract by 0.5%, creating the potential for an extended crisis.

Such a reduction would have profound consequences for the global economy. The last time China experienced a shrinking economy was in 1976, when the death of Communist Party leader Mao Zedong ended more than a decade of social and economic tumult inside the country. Unlike then, however, China is now the world’s second largest economy and a primary engine of global growth, meaning that any disruption to its economy will be felt worldwide.

The Bank warns that significant economic pain seems unavoidable in all countries but warns that the entire Asia Pacific region should prepare for “a serious impact” on poverty and welfare, through illness, death, and lost incomes.

In an attempt to militate against the economic shock, the World Bank has pledged to provide $14 billion in financial support to developing countries and deploy up to $160 billion over 15 months to protect the poor and vulnerable.

Fears of a region-wide recession have grown in recent weeks, as the virus continues to spread throughout much of Asia, resulting in widespread enforced lockdowns, with travel suspended, stores shut, and factories closed.

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