Asia’s economic growth this year will grind to a halt for the first time in 60 years, as the coronavirus crisis takes an “unprecedented” toll on the region’s service sector and major export destinations, the International Monetary Fund said.
IMF has said Sri Lanka’s gross domestic product would contract 0.5 percent in 2020, down 4.0% from an earlier growth projection of 3.5%.
Asia’s economic growth will grind to a halt for the first time in 60 years of postwar development because of the unprecedented impact of coronavirus, the IMF has warned. Speaking at a briefing on the regional economic outlook, Changyong Rhee, the IMF’s Asia director, warned that the slowdown would be worse than the global financial crisis of 2008-09 and the Asian financial crisis of 1997.
But the IMF still expects Asia to fare better than Europe or the US, reflecting China’s success in bringing the coronavirus under control and the region’s underlying growth prospects. “The impact of the coronavirus on the region will be severe, across the board and unprecedented,” said Rhee.
“Unlike during the global financial crisis, Asia’s real sector, especially the service sector, is being hit hard by containment measures of the coronavirus pandemic.”
Central banks across the region have moved to provide ample liquidity, cut interest rates and some have used quantitative easing. But additional actions may be needed for emerging-market Asian economies that have limited space for increased spending in their budgets. If the situation deteriorates, many emerging economies may to be forced to adopt a “whatever it takes” approach, despite their budget constraints and non-internationalized currencies. In many cases, they will face policy trade-offs. (IMF Blog)
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