Washington, March 31 (IANS) The World Bank has predicted that China’s economy could fall sharply in 2020 due to the coronavirus pandemic, with a growth estimate of 2.3 per cent in the baseline scenario and just 0.1 per cent in the lower-case scenario.
This is the first forecast by the World Bank since the start of the coronavirus pandemic and contrasts the 6.1 per cent growth China experienced in 2019, Efe news reported.
“We are witnessing an unusual combination of disruptive and mutually reinforcing events. Significant economic pain seems unavoidable in all countries and the risk of financial instability is high, especially in countries with excessive indebtedness,” the World Bank said in a report on East Asia and Pacific (EAP) issued on Monday.
In the case of China, the organization warned that industrial production in the country “also registered negative growth for the first time in more than 30 years”.
“It remains to be seen whether the government can switch on economic activity as abruptly as it was switched off,” the report said. “A large proportion of big industrial firms in China have already resumed operations, although small and medium enterprises continue to face problems.”
According to the Bank, growth in the rest of the developing EAP region is expected to slow to 1.3 per cent in the baseline and to -2.8 in the lower-case scenario in 2020, from an estimated 4.7 per cent in 2019.
The pandemic will also have a serious impact on poverty and welfare, the World Bank warned.
“Under the baseline growth scenario, nearly 24 million fewer people are estimated to escape poverty across developing EAP in 2020 than would have in the absence of the pandemic. Under the lower-case scenario, poverty is estimated to increase by about 11 million people,” according to the international organization.
Particularly vulnerable, the World Bank added, are the tourism sectors in Thailand and the Pacific Islands, and textile workers in Cambodia and Vietnam.
As a “vaccine against this virulent threat,” Aaditya Mattoo, the World Bank’s Chief Economist for East Asia and the Pacific, recommended that countries in the region deepen international cooperation, keep trade policy open, and coordinate macroeconomic policies.
Although the pandemic originated in the Chinese city of Wuhan last December, the number of confirmed coronavirus cases and deaths in the Asian giant was lesser than other countries like the US and Italy.
As of Tuesday, China reported 82,240 cases, with 3,309 fatalities, according to data compiled by the the Center for Systems Science and Engineering (CSSE) at the Washington-based Johns Hopkins University.
The US registered 164,274 cases, the highest in the world, while Italy had the largest number of deaths at 11,591.