World Bank forecasts worst economic slump in South Asia

World Bank forecasts worst  economic slump in South Asia
A worker sprays disinfectant on a Delhi Transport Corporation (DTC) bus as a precautionary measures against the spread of COVID-19 coronavirus at a bus depot in New Delhi. (AFP)
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Updated 13 April 2020

World Bank forecasts worst economic slump in South Asia

World Bank forecasts worst  economic slump in South Asia
  • Measures taken to counter the coronavirus disease have disrupted supply chains across the region

NEW DELHI: India and other South Asian countries are likely to record their worst growth performance in four decades this year due to the coronavirus outbreak, the World Bank said on Sunday.

The South Asian region, comprising eight countries, is likely to show economic growth of 1.8 percent to 2.8 percent this year, the World Bank said in its South Asia Economic Focus report, well down from the 6.3 percent it projected six months ago.
India’s economy, the region’s biggest, is expected to grow 1.5 percent to 2.8 percent in the fiscal year that started on April 1. The World Bank has estimated it will grow 4.8 percent to 5 percent in the fiscal year that ended on March 31.
“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 report said.
Other than India, the World Bank forecast that Sri Lanka, Nepal, Bhutan and Bangladesh will also see sharp falls in economic growth.
Three other countries — Pakistan, Afghanistan and the Maldives — are expected to fall into recession, the World Bank said in the report, which was based on country-level data available as of April 7.
Measures taken to counter the coronavirus have disrupted supply chains across South Asia, which has recorded more than 13,000 cases so far — still lower than many parts of the world.

SPEEDREAD

● The South Asian region, comprising eight countries, is likely to show economic growth of 1.8 percent to 2.8 percent this year, the World Bank says, well down from the 6.3 percent it projected six months ago.

● India’s economy is expected to grow 1.5 percent to 2.8 percent in the fiscal year. Pakistan, Afghanistan and the Maldives are expected to fall into recession.

● The report warned of a worst-case scenario in which the entire region would experience an economic contraction this year.

India’s lockdown of 1.3 billion people has also left millions out of work, disrupted big and small businesses and forced an exodus of migrant workers from the cities to their homes in villages.
In the event of prolonged and broad national lockdowns, the report warned of a worst-case scenario in which the entire region would experience an economic contraction this year.
To minimize short-term economic pain, the Bank called for countries in the region to announce more fiscal and monetary steps to support unemployed migrant workers, as well as debt relief for businesses and individuals.
India has so far unveiled a $23 billion economic plan to offer direct cash transfers to millions of poor people hit by its lockdown. In neighboring Pakistan, the government has announced a $6 billion plan to support the economy.
“The priority for all South Asian governments is to contain the virus spread and protect their people, especially the poorest who face considerable worse health and economic outcomes,” said senior World Bank official Hartwig Schafer.


Goldman Sachs nudges U.S. growth forecast higher on Biden stimulus plan

Goldman Sachs nudges U.S. growth forecast higher on Biden stimulus plan
Updated 17 January 2021

Goldman Sachs nudges U.S. growth forecast higher on Biden stimulus plan

Goldman Sachs nudges U.S. growth forecast higher on Biden stimulus plan
  • The bank expects economic growth of 6.6% in 2021
  • Biden outlined a $1.9 trillion stimulus package proposal on Thursday

Analysts at Goldman Sachs Group raised their U.S. growth forecast for the second time this month on expectations that President-elect Joe Biden’s fiscal stimulus plan will hasten the economy’s recovery from the COVID-19 pandemic.
The bank expects economic growth of 6.6% in 2021, compared with a previous forecast of 6.4%, according to a report published on Saturday. It also raised forecasts for how much stimulus the new administration will be able to push through in the near-term, to $1.1 trillion from $750 billion.
Biden outlined a $1.9 trillion stimulus package proposal on Thursday, saying bold investment was needed to jump-start the economy and accelerate the distribution of vaccines to bring the coronavirus under control.
“Larger boosts to disposable income and government spending imply stronger growth later in the year,” the bank’s analysts wrote.