The coronavirus pandemic in China may be getting better but the damage may already be done in terms of a blow to the Chinese economy. According to reports, the World Bank on March 30 warned that due to the impact of the coronavirus, China’s growth could come to a standstill and also drive 11 million people in East Asia into abject poverty.
As per reports, Aaditya Mattoo, World Bank chief economist for East Asia and the Pacific claimed that the virus had caused an unprecedented shock and this could bring growth to a screeching halt and as a result increase rate of poverty and unemployment across the region. As per the organisation's report, the region will see a sharp drop in growth and China’s growth is reportedly expected to fall down to 2.3 per cent from 6.1 per cent in 2019.
Due to the coronavirus, millions of people are in some form of lockdown in an effort to try and contain the spread of the deadly virus. According to reports, manufacturing activity and industrial production in China reduced for the first time in 30 years. According to the World Bank report, even in the best-case scenario of a strong recovery after a sharp slowdown can result in almost 24 million fewer people in the region escaping poverty. In the worst-case scenario, 11 million people could now descend into poverty if the slowdown is followed by a sluggish recovery.
The World Bank has called for implementation on measures that would cushion the reduction in household wages. The reports also added that in a globalized economy, the ‘destinies’ of many nations economies are interlinked and that a negative impact in China’s economy will affect other nations as well.
According to reports, Mattoo claimed that the world should follow South Korea’s example and increase testing so that economies and nations could return to normal soon.