Uncertain and Challenging times for the Economy
As the coronavirus crisis an unprecedented toll on the region’s service sector and major export destinations, International Monetary Fund said that Asia’s economic growth will grind to halt for the first time in 60 years. Changyong Rhee, the Director of IMF’s APAC Department said that policymakers must offer targeted support to households and firms hardest hit by travel bans, social distancing policies and other measures aimed at containing the pandemic. In these highly uncertain and challenging times for the economy, the APAC region is also getting largely affected. The impact of coronavirus on the region is expected to be severe and unprecedented.
Asian Economy to Suffer Zero Growth
Asia’s economy is likely to suffer zero growth this year for the first time in 60 years. While Asia is set to fare better than other regions suffering economic contractions, the projection is worse than the 4.7 percent average growth rates throughout the global financial crisis and the 1.3 percent increase during the Asian financial crisis in the late 1990s. The IMF expects a 7.6 percent expansion in Asian Economic growth next year on the assumption that containment policies succeed, but added the outlook was highly uncertain.
China’s Growth Outlook in Jeopardy
Asia’s export powerhouses were also taking a battering for slumping demand for their goods by key trading partners such as the US and the European countries. China’s economy is expected to grow by 1.2 percent this year, down from 6 percent growth in IMF’s January forecast. The world’s second largest economy is expected to see a rebound in later this year with growth to bounce back to 9.2 percent next year. IMF added that there could be risks to China’s growth outlook as the virus could return and delay normalization.
