Coronavirus could cost global economy $8.8 trillion
The global economy could haemorrhage between $5.8 trillion and $8.8 trillion (£4.7 trillion-£7.1trillion) this year depending on how long coronavirus containment measures last, the Asian Development Bank has said.
In the worst-case scenario, that would be equivalent to almost 10 per cent of the world’s output. Economists say the world is going through its worst economic shock since the Great Depression.
The estimate comes as data showed Germany’s economy shrank by 2.2 per cent in the first quarter in its biggest fall since the financial crisis.
Yesterday, US jobless claims figures showed that 36m Americans have claimed for unemployment benefits since the beginning of the coronavirus pandemic.
The Asian Development Bank (ADB)’s latest estimate of the cost of Covid-19 was far higher than a guess it made in early April. It said on 3 April that the hit would range from $2.0 trillion to $4.1 trillion.
The ADB focuses on supporting growth in Asia. It estimated that economic losses in Asia and the Pacific region could range from $1.7 trillion if lockdowns continue for three months to $2.5 trillion if they last six months. China could suffer losses between $1.1 trillion and $1.6 trillion, it said.
“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 praised central banks and governments around the world for unleashing unprecedented firepower to tackle the economic downturn.
It said that measures such as fiscal and monetary easing, increased health spending, and direct support for incomes and revenues could soften Covid‑19’s economic impact by as much as 30 per cent to 40 per cent.
As with all forecasts in the Covid-19 era, however, the Bank said things were highly uncertain.