The World Bank, Monday (27/9), said the spread of the Delta variant of COVID-19 had damaged economic recovery in the East Asia and Pacific region. As a result, the region is likely to experience a slowdown in economic growth and an increase in inequality levels.
Reuters citing the World Bank’s 2021 East Asia and Pacific economic development report, reported that economic activity began to slow in the second quarter of 2021, and growth forecasts in most countries in the region were corrected.
The World Bank said while China’s economy is projected to grow by 8.5 percent, the rest of the region is forecast to grow by only 2.5 percent, nearly 2 percentage points lower than forecast in April 2021.
“Economic recovery in developing East Asia and the Pacific is slowing down,” said Manuela Ferro, World Bank Vice President for East Asia and the Pacific.
“While in 2020 the region succeeded in tackling COVID-19 as other regions of the world struggled (against the outbreak), the increase in COVID-19 cases in 2021 (in the East Asia and Pacific region) has lowered the (economic) growth prospects for 2021,” he said. .
Myanmar’s economy is expected to contract by 18 percent while the group of Pacific island nations is expected to contract by 2.9 percent.
Myanmar, he said, would experience the largest contraction in employment in the region and the number of poor people in the country would increase.
“Undoubtedly the military takeover (in Myanmar) has led to disruption of economic activity accompanied by a movement of civil disobedience which means fewer people are going to work,” said World Bank East Asia and Pacific Chief Economist Aaditya Mattoo.
The report estimates most countries in the region, including Indonesia and the Philippines, could vaccinate more than 60% of their population by the first half of 2022. While doing so would not eliminate coronavirus infections, it would significantly reduce mortality, allowing a restart. economic activity.
According to the World Bank, the damage caused by the resurgence and persistence of COVID-19 is likely to undermine growth and increase inequality in the long term.
“Accelerated vaccination and testing to control COVID-19 infection could revive economic activity in struggling countries in the first half of 2022, and double their growth rates next year,” Mattoo said.
“But in the long term, only deeper reforms can prevent slower growth and increasing levels of inequality, two factors combined to impoverishment unprecedented in the region in this century,” he added.
The World Bank said the region needed to make serious efforts in four areas to deal with the increase in the coronavirus, namely overcoming vaccine doubts and limited distribution capacity; improve testing and tracing; increased regional vaccine production; and strengthen local health systems. [ah/rs]