World Bank says Delta variant slowing economic growth in East Asia and Pacific By Reuters
By Kanishka Singh
(Reuters) – The East Asia and Pacific region’s recovery has been undermined by the spread of the COVID-19 Delta variant, which is likely slowing economic growth and increasing inequality in the region, the World Bank said on Monday.
According to the World Bank’s East Asia and Pacific 2021 Economic Update, the pace of economic activity has been slowing in the first quarter of 2021. In addition, growth projections have been reduced for many countries in the region.
The World Bank forecasts that China’s economy will expand 8.5% while the rest of the region will grow 2.5%. This is nearly two percentage points more than was forecasted in April 2021.
Manuela Ferro (NYSE,:), World Bank Vice-President for East Asia and Pacific said that “the economic recovery in developing East Asia and Pacific is facing a reversal” of fortunes.
While the 2020 region had COVID-19, other parts of the globe struggled to do so in the same year, 2021’s rise in COVID-19 has lowered the growth prospects for the country.
It is estimated that most countries within the region, which includes Indonesia and Philippines, will be able to vaccinate over 60% of their population by the second half of 2022. Although it won’t eliminate coronavirus, this would dramatically reduce the mortality rate and allow for a return to economic activity.
According to the World Bank, COVID-19’s persistence and resurgence will likely cause inequality and slow growth over time.
Aaditya Mattoo, World Bank East Asia and Pacific chief economist said that accelerated vaccination and testing to combat COVID-19 infections can revive the economy in economically weak countries within the first half 2022 and nearly double their growth rate by next year.
But, in the long term, deeper reforms are required to prevent slow growth and increased inequality. This combination is a debilitating one that the region hasn’t seen since the beginning of this century.
According to the World Bank, the region must make serious efforts on four fronts in order to combat the coronavirus rise: improving testing and traceability; decreasing vaccine distribution limitations; fixing vaccine hesitancy; strengthening regional health systems; and increasing vaccine production.
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