The World Bank is estimating that the cornavirus outbreak will cause economic growth to slow significantly this year in China and other East Asian-Pacific countries, throwing millions into poverty. Under a worse-case scenario, the region could suffer its sharpest downturn since a devastating currency crisis more than two decades ago, the bank said in an updated forecast released Monday. The bank’s report projects that growth in the region would slow to 2.1% this year from 5.8% in 2019 under a “baseline” forecast in which economic recovery takes hold this summer.
But under a worse case, in which the adverse effects of the virus spillover into next year, the region’s economy would contract 0.5%, the bank estimates. That would represent the weakest performance for the region since the 1997-98 Asian currency crisis, which plunged 40% of the globe into recession.
More than 11 million people could fall into poverty in the region under the worse-case scenario, the bank estimates. That’s in stark contrast to its earlier forecast that growth would be sufficient this year to lift 35 million people out of poverty.