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Coronavirus can hurt global GDP up to 0.4%, says ADB

Coronavirus can hurt global GDP up to 0.4%, says ADB

The rapid spread of the deadly Covid-19 could severely impact global economic growth in 2020, the Manila-based Asian Development Bank has warned. The multilateral agency, which estimated an overall global financial loss between $77 billion and $347 billion, could reduce the gross domestic product (GDP) by 0.1-0.4 per cent for the current year. The magnitude of the economic losses will depend on how the outbreak evolves, which remains highly uncertain, the ADB said in a statement.

This could cause concerns for India, which was hoping to reverse trends of an economic slowdown in the coming months.

“There are many uncertainties about Covid-19, including its economic impact… This requires the use of multiple scenarios to provide a clearer picture of potential losses,” said ADB chief economist Yasuyuki Sawada.

The spread of the coronavirus has already impacted over 80 countries.

The ADB hoped that governments across the world would prepare clear and decisive responses, depending on their analysis to mitigate the human and economic impacts of this outbreak.

In February, the ADB announced a support of over $22 million to enhance detection and prevention. “ADB stands ready to provide further support to its developing members in their efforts to respond to the adverse impact of COVID-19,” the statement added.

The World Bank has also committed an initial emergency package of $12 billion to help cope with the situation.

Meanwhile, the Organization for Economic Co-operation & Development (OECD) has already slashed growth projection for the world economy in 2020 from 2.9 per cent made in November to 2.4 per cent. What is worrisome is the fact that it warned that if the virus stays longer and is more intense, global economic growth could be less than 2 per cent at around 1.5 per cent.

Global oil prices have also dropped to an average of about $50 a barrel since January..