Coronavirus may cost the global economy $8.8 trillion, says Asian Development Bank
The cost of the coronavirus pandemic could reach as much as $8.8 trillion, or almost 10 percent of global gross domestic product, depending on how long the outbreak continues and the strength of government responses, according to the Asian Development Bank.
A shorter containment period of three months coupled with strong policy measures could limit the impact to $4.1 trillion, or 4.5 percent of world output, the Manila-based lender said in a report on Friday. The Asia Pacific region is expected to account for about 30 percent of the overall decline in global output, it said.
The analysis “highlights the important role policy interventions can play to help mitigate damage to economies,” ADB Chief Economist Yasuyuki Sawada said in a statement.
The new cost estimates are more than twice the range of $2 trillion to $4.1 trillion the development bank gave April 3. There are now more than 4 million confirmed cases of coronavirus globally with deaths exceeding 300,000.
The lender suggests boosting health systems, as well as income and employment protections, to avoid an even more difficult recovery. Sustained measures from governments could soften the economic impact of the virus by as much as 40 percent, ADB said.
Between 158 million to 242 million jobs could be lost globally, with 70 percent of those in Asia and the Pacific, according to the ADB.
Travel restrictions and lockdowns implemented to arrest the virus’s spread will likely cut global trade by $1.7 trillion to $2.6 trillion, it said.