Pandemic to keep Asia’s growth at lowest since 1967, warns World Bank

Growth in China was expected to come in at 2% this year, boosted by government spending. (File/AFP)
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Updated 29 September 2020

Pandemic to keep Asia’s growth at lowest since 1967, warns World Bank

  • The bank said the region this year is projected to grow by only 0.9%, the lowest rate since 1967
  • The rest of the East Asia and Pacific region was projected to see a 3.5% contraction

TOKYO: The coronavirus pandemic 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 said in an economic update on Monday.
The bank said the region this year is projected to grow by only 0.9%, the lowest rate since 1967.
Growth in China was expected to come in at 2% this year, boosted by government spending, strong exports and a 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% 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 (East Asia and Pacific) economies that rely on trade and tourism hard,” it said.
Countries in the region may need to pursue fiscal reform to mobilize 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 $5.50 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 that 33 million people who would have in the absence of the pandemic escaped poverty would remain in it this year.
“The region is confronted with an unprecedented set of challenges,” said Victoria Kwakwa, vice president for East Asia and the Pacific at the World Bank.
“But there are smart policy options available that can soften these tradeoffs — such as investing in testing and tracing capacity and durably expanding social protection to cover the poor and the informal sector.”


Turkish lira slides to record low of 8 against dollar

Updated 5 min 34 sec ago

Turkish lira slides to record low of 8 against dollar

  • The lira has lost 26 percent of its value against the dollar since the start of the year
  • The Turkish currency also recorded its lowest level against the euro, trading near 9.52

ANKARA: Turkey’s lira on Monday set a new record low against the US dollar after the central bank refused to raise its main interest rate and tensions increased sharply with the country’s Western allies.
The lira was at 8.03 against the dollar at around 0730 GMT, suffering a loss of nearly one percent since the start of the day.
The Turkish currency also recorded its lowest level against the euro, trading near 9.52.
The lira has lost 26 percent of its value against the dollar since the start of the year.
Turkey’s central bank last week upset the markets which had expected a 175 basis points hike to the one-week repo rate.
The bank opted instead to keep the rate unchanged at 10.25 percent despite market concerns over persistently high inflation, which remains in double-digits, and worries about a sharp drop in foreign currency reserves.
Consumer price inflation was 11.75 percent in September.
The bank’s governor will deliver the quarterly inflation report on Wednesday in Istanbul.
The lira’s decline comes at a time of strained relations with NATO allies including France, Greece and the United States over multiple issues.
Turkish President Recep Tayyip Erdogan angered Paris after he said his French counterpart Emmanuel Macron needed to have “mental checks” at the weekend.
France responded by recalling its ambassador to Ankara and on Saturday described Erdogan’s comments as “unacceptable.”