Asia as a region will not register any economic growth this year for the first time in 60 years because of the coronavirus pandemic, according to forecasts made by the International Monetary Fund, reports CNBC.
Asia, which has been among the fastest-growing regions in the world, still registered average growth rates of 1.3 per cent and 4.7 per cent during the financial crisis in 1997 and the global financial crisis around 2008-2009 respectively, said the IMF.
‘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,’ IMF director for the Asia and Pacific department Chang Yong Rhee wrote in a blog post published on Wednesday.
The coronavirus pandemic, which has infected more than 20 lakh people and killed over 1,30,000 others, has halted much of global economic activity as authorities lock down countries and cities to stem the fastspreading disease.
The IMF on Tuesday said that the global economy was expected to shrink by 3 per cent this year.
The United States is projected to shrink by 5.9 per cent while the euro area as a whole is forecast to contract 7.5 per cent.
China is one of the few economies poised to grow in 2020, according to the fund’s projections. But the IMF’s 1.2 per cent growth forecast for the country is a sharp slowdown from China’s economic performance in previous years.
‘This sharply contrasts with China’s growth performance during the Global Financial Crisis, which was little changed at 9.4 percent in 2009 thanks to the important fiscal stimulus of about 8 percent of GDP,’ Rhee wrote, referring to gross domestic product, which is a broad measure of the size of an economy.
‘We cannot expect that magnitude of stimulus this time, and China won’t help Asia’s growth as it did in 2009,’ he added.
As a result of that, the fund has made ‘substantial’ downward revisions in its forecasts for Asian economies, said Chang.
The projections given by Rhee during a press conference in Washington DC said that Japan is to shrink by 5.2 per cent, India to grow by 1.9 per cent, South Korea to shrink by 1.2 per cent while Southeast Asia’s five largest economies — Indonesia, Thailand, Malaysia, Singapore and the Philippines — to collectively contract by 1.3 per cent.
Still, Asia ‘looks to fare better than other regions in terms of activity,’ Rhee wrote in the blog post. He said that growth in the region could rebound strongly in 2021 if measures to contain the virus and stimulus to support the economy worked.
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