Global economic losses caused by the coronavirus pandemic could be between $5.8 trillion and $8.8 trillion this year, the Asian Development Bank (ADB) said on Friday, more than double its earlier estimates as containment measures paralyse economies.
The ADB's forecast, equal to 6.4% to 9.7% of global gross domestic product, was worse than projections in April when it said the global economy could suffer between $2.0 trillion and $4.1 trillion in losses, depending on how long containment measures were in place. "This new analysis presents a broad picture of the very significant potential economic impact of COVID-19," said ADB Chief Economist Yasuyuki Sawada. "It also highlights the important role policy interventions can play to help mitigate damage to economies."
The ADB said the upper end of the range assumed curbs on movement and businesses lasting six months, while the bottom end assumed they would last three months. After the health crisis brought the economy of China, where the virus surfaced in December, to a virtual halt in the first quarter, several countries and territories have reported a rise in infections and deaths, leading to widespread travel bans and stay-at-home orders.
Nearly 300,000 people worldwide have died from complications from the virus, which has infected more than 4.3 million people. Measures to contain the spread could inflict $1.7 trillion to $2.5 trillion in economic losses in Asia, and between $1.1 trillion and $1.6 trillion in China, the ADB said.
Travel restrictions and lockdowns will likely cut global trade by $1.7 trillion to $2.6 trillion and put between 158 million and 242 million people out of work, the ADB said. Global central banks have moved aggressively with sweeping emergency rate cuts and fiscal stimulus measures to help combat the pandemic that jolted financial markets and stoked fears of a deep global recession.