The coronavirus pandemic could cost the global economy between $5.8-trillion and $8.8-trillion, according to the Asian Development Bank (ADB).
The BBC reports that this is more than double last month’s prediction and equates to 6.4%-9.7% of the world’s economic output. This comes as measures to slow the spread of COVID-19 continue to paralyse economic activity around the world.
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Globally, authorities have taken aggressive action to cushion their economies from the outbreak’s impact.
“This new analysis presents a broad picture of the very significant potential economic impact of Covid-19,” the ADB’s chief economist Yasuyuki Sawada says.
“It also highlights the important role policy interventions can play to help mitigate damage to economies,” he adds.
The ADB says that the top end of the range was based on the assumption that curbs to movement and businesses operating would last six months, while the bottom end assumed the restrictions would remain in place for three months.
Central banks across the globe have moved rapidly to cut interest rates and roll out massive stimulus measures to help combat the economic impact of the outbreak that has rocked financial markets and raised fears of a deep global recession.
Yesterday, new figures showed the huge impact of COVID-19 on the world’s biggest economy as the number of Americans seeking unemployment benefits jumped by almost 3-million last week. Nearly one-quarter of the US workforce is currently claiming some form of benefits.
Earlier this week the chairman of the US Federal Reserve warned that America’s economic recovery is likely to be slower than initially hoped. Jerome Powell cautioned that the US faces a slow and painful economic recovery without more government relief.
In South Africa, the lockdown has dealt a body blow to an already weak economy, with estimates that it will contract more than 5% this year. SA Treasury’s worst-case scenario projects a 16.1% contraction and 7-million job losses.
Edited by Luis Monzon
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