Coronavirus could cut global economic output by as much as $8.8 trillion (£7.3 trillion), with the outlook having worsened significantly in the past month, the Asian Development Bank has said.
The bank warned on Friday that Covid-19 would result in $5.8 trillion to $8.8 trillion of lost gross domestic product – or 6.4 per cent to 9.7 per cent of the world’s output. That’s more than twice as bad as the ADB forecast in April.
However, government measures to mitigate the economic impact could reduce that figure by as much as 40 per cent, ADB’s chief economist Yasuyuki Sawada said.
As some countries, including the UK, lay out plans to ease lockdowns and get more people back to work, Mr Sawada cautioned that containing the pandemic is key to reducing the economic cost.
Testing, tracing, isolation, effective social distancing, and securing protective and medical equipment are all “essential elements” of containing Covid-19, he said.
He also pointed to the importance of government support for struggling families and businesses to lessen the adverse effects of the pandemic and to avoid long-term consequences for growth and development.
“Rapid and effective containment will allow for a faster recovery,” he said.
“Then, it is critical to identify industries and occupations in terms of essentiality and economic importance, and their ability to operate safely with adequate social distancing.
“Finally, governments should reopen the economy sequentially, balancing health risks and economic considerations, and being ready to tighten if outbreaks reoccur. For all of this, having adequate data and information is key.”
His words came as the UK government faced criticism from scientists over its easing of lockdown restrictions this week.
The Independent Scientific Advisory Group for Emergencies (Sage) warned on Tuesday that the UK faces “inevitable” future lockdowns if the government implements its “potentially dangerous” coronavirus strategy.
Ministers laid out plans this week to get sectors including construction and manufacturing back to work, and to restart the housing market.
However, the government was accused of confusing people with it’s new message to “stay alert”, replacing a previous instruction to “stay at home”.
The number of deaths in the UK has fallen in recent days but the Independent Sage, an alternative to the government’s official scientific advisory panel, said numbers of infections were still too high to implement an effective policy of tracking, tracing and isolating cases.