IMF: Asian economic growth to halt for first time in 60 years due to coronavirus

Asia’s economic growth will halt for the first time in 60 years due to the coronavirus pandemic, the International Monetary Fund (IMF) has warned on Thursday.

Speaking at a briefing on the regional economic outlook, IMF’s Asia director Chang Yong Rhee warned that the slowdown would be worse than the 2008 global financial crisis and the 1997 Asian financial crisis.

“The impact of the coronavirus on the region will be severe, across the board, and unprecedented,” Rhee said.

“Unlike during the global financial crisis, Asia’s real sector, especially the service sector, is being hit hard by containment measures of the coronavirus pandemic.”

The IMF expected 1.2 percent growth in China and 1.9 per cent growth in India for 2020 but noted that the slowdown in advanced economies was more severe. Japan’s economy is expected to contract by 5.2 percent and Australia’s by 6.7 percent, according to the IMF.

The Fund also forecasted that South Korea’s economy would shrink by 1.2 percent, showing the economic value of its strategy to curb the spread of coronavirus with aggressive testing.

Rhee noted that a quick recovery from the crisis was still possible.

“For 2021, there is hope: if containment policies succeed, we will see a rebound in growth. However, it is highly uncertain how this year will progress.”