World Bank estimates worst economic slump in South Asia
The dire economic effects are already much in evidence, with widespread lockdowns freezing most normal activity
New Delhi: South Asia is on course for its worst economic performance in 40 years, with decades of progress in the battle against poverty at risk, because of coronavirus, the World Bank said Sunday.
India, Bangladesh, Pakistan, Afghanistan and other smaller nations, which have 1.8 billion people and some of the planet's most densely populated cities, have so far reported relatively few coronavirus cases but experts fear they could be the next hotspots.
The World Bank said the coronavirus outbreak has severely disrupted the Indian economy, magnifying pre-existing risks to its outlook.
Impact of COVID-19, the World Bank estimated the Indian economy to decelerate to 5 per cent in 2020 and projected a sharp growth deceleration in fiscal 2021 to 2.8 per cent in a baseline scenario.
The COVID-19 outbreak came at a time when India's economy was already slowing, due to persistent financial sector weaknesses, the report said.
"South Asia finds itself in a perfect storm of adverse effects. Tourism has dried up, supply chains have been disrupted, demand for garments has collapsed and consumer and investor sentiments have deteriorated," said a World Bank report.
It slashed its growth forecast for the region this year to 1.8-2.8 percent from its pre-pandemic projection of 6.3 percent, with at least half the countries falling into "deep recession".
Worst hit will be the Maldives where the collapse of tourism will result in gross domestic output contracting by as much as 13 percent, while Afghanistan could shrink by as much as 5.9 percent and Pakistan by up to 2.2 percent.