COVID-19 is expected to lead to the slowest growth in more than 50 years in East Asia and the Pacific as well as China, while up to 38 million people are set to be pushed back into poverty, the World Bank says.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
In an economic update released on Monday, the bank said the region this year is projected to grow by only 0.9 per cent, the lowest rate since 1967.
Growth in China was expected to come in at 2 per cent, boosted by government spending, strong exports and low rate of new coronavirus infections since March but held back by slow domestic consumption.
The rest of the East Asia and Pacific region was projected to see a 3.5 per cent contraction, the World Bank said.
The pandemic and efforts to contain its spread led to a "significant curtailment" of economic activity, the report said.
"These domestic difficulties were compounded by the pandemic-induced global recession, which hit EAP economies that rely on trade and tourism hard," it said.
Countries in the region may need to pursue fiscal reform to mobilise revenue in response to the economic and financial impact from the pandemic, while social protection programs can help support workers' integration back into the economy, the Washington, DC-based bank said.
"Countries with well-functioning social protection programs, and good implementation infrastructure, pre-COVID, have been able to scale up more quickly during the pandemic," it said.
The economic shock of the pandemic was also expected to lead to a jump in poverty, defined as income of $US5.50 a day, the bank said, adding that based on past experience and the latest gross domestic product forecasts, poverty could expand by 33 million to 38 million people to see its first rise in 20 years.
The bank said 33 million people who would have in the absence of the pandemic escaped poverty would remain in it this year.
Australian Associated Press