East Asia and the Pacific region have been hit hard by the coronavirus pandemic, bringing economic growth rates down to levels not seen since 1967, the World Bank said in a report released Monday.
The region as a whole will grow by only 0.9 percent, and for the first time in 20 years, poverty across the region is expected to increase.
China, the origin of the virus that has claimed more than a million lives worldwide, is expected to post at least 2 percent growth in 2020, thanks to its early control of the virus’s spread and heavy government spending, the report said. The rest of the region, however, will see a contraction of 3.5 percent. The Pacific islands are expected to be hit especially hard.
“COVID-19 is not only hitting the poor the hardest, it is creating ‘new poor.’ The region is confronted with an unprecedented set of challenges, and governments are facing tough choices,” Victoria Kwakwa, World Bank vice president for East Asia and the Pacific, said in the report.
The Washington-based financial institution recommended investing in track-and-trace programs to control -the virus and expand social protections for the hard-hit informal sector and poor. It warned that if swift action isn’t taken, growth over the next decade could drop by 1 percentage point a year.
With the advent of a vaccine, the report projected growth of 5.1 percent across the region in 2021, though output is expected to remain below pre-pandemic levels for the next two years.