MANILA, Philippines _ The cost of the coronavirus pandemic could be as high as $4.1 trillion, or almost 5% of global gross domestic product, depending on the disease's spread through Europe, the U.S. and other major economies, the Asian Development Bank said.
A shorter containment period could limit the damage to $2 trillion, or 2.3% of world output, the Manila-based lender said in its Asian Development Outlook report released Friday. Developing Asia, including China, accounts for 22% to 36% of the pandemic's total cost, it said.
"No one can say how widely the COVID-19 pandemic may spread, and containment may take longer than currently projected," Yasuyuki Sawada, the ADB's chief economist, said in the report. "The possibility of severe financial turmoil and financial crises cannot be discounted."
On March 6, the ADB estimated the virus outbreak could cost the world economy $347 billion, and cut the global growth rate by as much as 0.4 percentage point. Since then, the epicenter of the virus has shifted from China to Europe and the U.S., with the number of global infections now topping 1 million.
The ADB cut its 2020 growth forecast for Asia to 2.2% from 5.5% estimated in September last year. China's forecast was slashed to 2.3% from 6%, and compares with 6.1% growth last year. All of developing Asia's subregions will see weaker growth this year, according to the report.
Inflation will likely accelerate on higher food costs, even as weaker economic activity and softer commodity prices mitigate any price spikes, before easing in 2021, the ADB said.
