ADB: Coronavirus ‘could cost global economy $8.8tn’

Coronavirus 'could cost global economy $8.8tn'
World economy severely suffering due to coronavirus pandemic. Source: Getty Images
2 Min Read

Daily US Times: The Asian Development Bank (ADB) estimates that coronavirus pandemic could cost the global economy between $5.8tn and $8.8tn (£4.7tn-£7.1tn).

That’s more than double what was predicted last month and equates to 6.4%-9.7% of the world’s economic output. It comes as measures to slow the spread of Covid-19 continue to paralyse economic activity around the world.

Governments across the world have been taking aggressive steps to cushion their economies from the impact of the outbreak.

ADB’s chief economist Yasuyuki Sawada said: “This new analysis presents a broad picture of the very significant potential economic impact of Covid-19,” adding that “It also highlights the important role policy interventions can play to help mitigate damage to economies.”

The ADB said the top end of the range was based on businesses operating would last six months and the assumption that curbs to movement, while the bottom end assumed the restrictions would remain in place for three months.

Central banks around the world have moved aggressively to roll out massive stimulus measures and cut interest rates to help combat the impact of the outbreak that has rocked financial markets and raised fears of a deep global recession.

The new figures showed the huge impact on coronavirus on America’s economy. the biggest in the world, as the number of Americans seeking unemployment benefits, jumped by almost 3 million last week. Nearly a quarter of the US workforce got the hit of the pandemic as they are now claiming some form of benifits.

Chairman of the US Federal Reserve, Jerome Powell warned earlier this month that America’s economic recovery is likely to be slower than initially hoped. He cautioned that the US faces a slow and painful economic recovery without more government relief.

At the same time, UK government’s estimated efforts to combat the coronavirus pandemic has risen to £123.2bn. The Office for Budget Responsibility said it now expects annual borrowing to equal 15.2% of the UK economy, with increased cost of the government’s furlough scheme being the main cause for the increase.

You may read: Coronavirus may never go away, World Health Organization warns