Coronavirus pandemic could cause losses up to $8.8 trillion to the global economy this year, said the Asian Development Bank (ADB), more than double its earlier estimates as lockdown restrictions paralyze economies.
The estimated loss equates to 6.4%-9.7% of the world’s economic output. It comes as measures to contain the spread of Covid-19.
Globally, governments have taken aggressive actions 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 said.
“It also highlights the important role policy interventions can play to help mitigate damage to economies,” he added.
Up to 242 million jobs will be lost due to the virus, more than seven times higher than the employment losses seen during the global financial crisis a decade ago. Foregone labour income could top $1.8 trillion.
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.
“These will be difficult to recoup,” the Manila-based lender said, warning it could not discount the possibility of a financial crisis if the pandemic was not contained quickly enough to prevent defaults and bankruptcies.
