The coronavirus crisis and the lockdowns imposed by national governments as they attempt to the halt the spread of the pandemic could cause a grave crisis for the economies of South Asia, the World Bank says. The economic impact of the coronavirus threatens to undo decades of progress in the region’s battle against poverty.
The South Asia region has a population of about 1.8 billion, with some of the most densely populated cities in the world. India, Pakistan, Bangladesh and Sri Lanka have not seen the death tolls that nations like China or Italy have, but experts fear they could be the next hotspots.
Meanwhile, according to the World Bank report, the coronavirus has wreaked havoc on their economies with tourism collapsing, disruption to supply chains, plummeting demand for the garments that are produced in the region and falling consumer and investor sentiments.
The World Bank has cut its growth forecast for South Asia for 2020 to 1.8%, from its earlier estimate of 6.3%, made before the coronavirus outbreak. At least half the countries in this region could fall into "deep recession".
The biggest economy in South Asia, India, could post growth of just 1.5% in its financial year, down from around 5%, based on World Bank estimates.
The World Bank advised the governments of the South Asian nations to "ramp up action to curb the health emergency, protect their people, especially the poorest and most vulnerable, and set the stage now for fast economic recovery". Other recommendations include temporary work programs for migrant workers, and debt relief for businesses and individuals, in addition to cutting red tape on essential imports and exports.
The World Bank plant to use up to $160 billion in financial support over the next 15 months to help vulnerable countries deal with the coronavirus crisis and to support their economic recovery.