The World Bank forecasted slower economic growth in the East Asia and Pacific region hit by the novel coronavirus, in face of the prospect of a global financial shock and recession, according to a report released on Tuesday.
China's economic growth is projected to decline to 2.3 percent in the baseline scenario, and 0.1 percent in the lower case scenario in 2020, down from 6.1 percent in 2019, according to the World Bank's updated economic report for the East Asia and Pacific region.
Growth in the region is projected to slow to 2.1 percent in the baseline forecast, and to negative 0.5 percent in the lower case scenario this year, from an estimated 5.8 percent in 2019. Containment of the epidemic would allow for sustained recovery in the region, although risks to the outlook from financial market stress would remain high, the report showed.
The World Bank called on developing countries in the East Asia and Pacific region to take action immediately, including urgent investments in healthcare capacity and targeted fiscal measures, to mitigate some of the impact of the outbreak.
The report also called for international cooperation and new cross-border public-private partnerships to ramp up production and supply of key medical supplies and services in the face of the pandemic, and ensure financial stability in the aftermath.
Trade policy should stay open so medical and other supplies are available to all countries, as well as facilitate the region's rapid economic recovery, it said.
"Countries in East Asia and the Pacific that were already coping with international trade tensions and the repercussions of the spread of COVID-19 in China are now faced with a global shock," said Victoria Kwakwa, Vice President for East Asia and the Pacific at the World Bank.
"The good news is that the region has strengths it can tap, but countries will have to act fast and at a scale not previously imagined," said Kwakwa.
Another policy recommendation is easing credit to help households smooth their consumption and help firms survive the immediate shock, the report said.
The World Bank Group is rolling out a $14 billion fast-track package to strengthen COVID-19 response in developing countries and shorten recovery time. The immediate response includes financing, policy advice and technical assistance to help countries cope with health and economic impacts of the outbreak.