International Monetary Fund (IMF) in a report published on April 16 warned that Asia’s economic growth in the year 2020 will most likely "suffer zero growth" for the first time in 60 years. Though it added that Asia will likely fair better than other regions, the projections are worse than the 4.7 per cent average growth rates during the global financial crisis and 1.3 per cent rise during the Asian financial crisis in the 1990s. The coronavirus infection which has led to the crisis has till now infected 3,33,568 and killed 12,088 across the continent.
Changyong Rhee, the director of IMF’s Asia and Pacific department, reportedly said that the lawmakers must offer assistance to small firms that are constantly battling for survival amid lockdowns and isolation measures which are imposed in a bid to stem the spread of COVID-19 pandemic.
These are highly uncertain and challenging times for the global economy. The Asia-Pacific region is no exception. The impact of the coronavirus on the region will be severe, across the board, and unprecedented. This is not the time for business as usual. Asian countries need to use all policy instruments in their toolkits, he said in a virtual press briefing.
The global financial organisation also opined that the pandemic was directly hitting the service sector by forcing the workers to stay home and shops to close. Major Asian countries like India and Japan have imposed strict restrictions on citizens. In addition to that, the region's export houses were also battering from slumping demands from trading partners like the US and Europe.
According to the IMF, the US’ handling down of cash to people, as a part of its stimulus package, was not a good measure. Instead, it advises authorities to stop unemployment by not letting small firms come to a halt. It added that Asan policymakers should offer "targeted support" to small businesses and provide liquidity to the markets as well as ease the financial stress on local markets. “Emerging economies in the region should tap bilateral and multilateral swap lines, seek financial support from multilateral institutions, and use capital controls as needed to battle any disruptive capital outflows caused by the pandemic,” IMF said.
(Image Credits: AP)