Daily Mirror (Sri Lanka)

South Asia to ex­pe­ri­ence worst eco­nomic plunge

- Business · Finance · Stocks & Markets · World Finances · Financial Markets · South Asian Association for Regional Cooperation · Asia · World Bank · India

In­for­mal work­ers hit hard­est South Asia is set to plunge into its worst-ever re­ces­sion as the dev­as­tat­ing im­pacts of COVID19 on the re­gion’s economies linger on, tak­ing a dis­pro­por­tion­ate toll on in­for­mal work­ers and push­ing mil­lions of South Asians into ex­treme poverty, says the World Bank in its twice-a-year­re­gional up­date.

Re­leased yes­ter­day, the lat­est South Asia Eco­nomic Fo­cus Beaten or Bro­ken? fore­casts a sharper than ex­pected eco­nomic slump across the re­gion, with re­gional growth ex­pected to con­tract by 7.7 per­cent in 2020, af­ter top­ping 6 per­cent an­nu­ally in the past five years. In­dia’s econ­omy, the re­gion’s largest, is ex­pected to con­tract by 9.6 per­cent in the fis­cal year that started in March 2020. Re­gional growth is pro­jected to re­bound to 4.5 per­cent in 2021.

Fac­tor­ing in pop­u­la­tion growth, how­ever, in­come-per-capita in the re­gion will re­main 6

per­cent be­low 2019 es­ti­mates, in­di­cat­ing that the ex­pected re­bound will not off­set the last­ing eco­nomic dam­age caused by the pan­demic.

In pre­vi­ous re­ces­sions, fall­ing in­vest­ment and ex­ports led the down­turn. This time is dif­fer­ent, as pri­vate con­sump­tion, tra­di­tion­ally the back­bone of de­mand in South Asia and a core in­di­ca­tor of eco­nomic wel­fare, will de­cline by more than 10 per­cent, fur­ther spik­ing poverty rates. A de­cline in re­mit­tances is also ex­pected to ac­cel­er­ate loss of liveli­hoods for the poor­est in some coun­tries.

 ??  ?? Hartwig Schafer
Hartwig Schafer
 ??  ?? Hans Tim­mer
Hans Tim­mer

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