South Asia is likely to experience its first economic slumps in four decades, the World Bank predicts. The major cause is none other than the coronavirus outbreak.
With the rampaging COVID-19 plague, the global economy is on its way to a recession. South Asia, witnessing various negative impacts prompted by the pandemic, is no exception.
According to World Bank, the region, which compromises eight countries, potentially displays economic growth of 1.8% to 2.8 this year. This is far behind the 6.3% growth foreseen by the institution six month prior.
“The green shoots of a rebound that were observable at the end of 2019 have been overtaken by the negative impacts of the global crisis,” the World Bank said in South Asia Economic Focus report.
World Bank believes that the global pandemic will greatly widen the economic gap in the region. Considering the economic statuses of the eight countries, poverty has become a major issue they have to deal with for decades.
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Coronavirus Economic Impact in South Asia
During the coronavirus outbreak, various South Asian economic sectors suffer from it. Among them are halting economic activities, collapsing trade and supply chains, as well as stress in the financial and banking sectors.
India, the region’s biggest economy, will possibly have 1.5% to 2.8% growth in the fiscal year starting in April. Similar to the country, Sri Lanka, Nepal, Bhutan, and Bangladesh will most likely experience sharp economic downfall.
The other three countries, being Pakistan, Afghanistan, and Maldives, might likely fall into recession. World Bank predicts the countries’ potential recession based on their country-level data available as of April 7.
Accordingly, the region confirms approximately 13,000 positive cases up to this day, which is actually lower than other parts of the world. However, the impact is so great that it poses considerable issues like unemployment, business disruption, and economic contraction.
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