The analysis “highlights the important role policy interventions can play to help mitigate damage to economies,” ADB Chief Economist Yasuyuki Sawada said in a statement.
The new cost estimates are more than twice the range of $2 trillion to $4.1 trillion the development bank gave April 3. There are now more than 4 million confirmed cases of coronavirus globally with deaths exceeding 300,000.
The lender suggests boosting health systems, as well as income and employment protections, to avoid an even more difficult recovery. Sustained measures from governments could soften the economic impact of the virus by as much as 40%, ADB said.
| ADB’s estimated global impact of virus | % of GDP | Losses ($ billion) |
|---|---|---|
| Containment of 3 months with policy measures | -4.5 | 4,095.8 |
| Containment of 6 months with policy measures | -5.9 | 5,387.8 |
| Containment of 3 months | -6.4 | 5,796.9 |
| Containment of 6 months | -9.7 | 8,789.9 |
Between 158 million to 242 million jobs could be lost globally, with 70% of those in Asia and the Pacific, according to the ADB.
As consumption and investment decline, wages will drop globally, particularly in the U.S. and Europe, Sawada said in an online briefing on Friday.
“This is a health risk and not driven by fundamental economic problem,” he said. “Smart health policies and containment policies are really the key,” he said, citing measures implemented in South Korea and Vietnam.
Travel restrictions and lockdowns implemented to arrest the virus’s spread will likely cut global trade by $1.7 trillion to $2.6 trillion, it said.
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