Coronavirus stands to clean $3b off Bangladesh economy
Bangladesh's gross domestic product may contract by while much as 1.1 per cent in the hypothetical worst-case situation of a significant outbreak of coronavirus in the country, said the Asian Development Bank (ADB) in an analysis.
That means, the novel virus, which is however to reach in Bangladesh, could wipe $3.02 billion off the $300 billion-plus economy.
In that scenario, 894,930 careers will be lost, in line with the ADB.
The ongoing COVID-19 outbreak influences China and other growing Asian economies through numerous channels, including sharp decline in domestic demand, lower tourism and business travel, trade and production linkages, supply disruptions and health effects.
The magnitude of the monetary impact will rely upon the way the outbreak evolves, which remains highly uncertain, the Manila-based lender said.
China may be the biggest trading spouse of Bangladesh and the largest source of recycleables. The world's second largest economy accounted for greater than a fifth of the country's imports of $56 billion in fiscal 2018-19, Bangladesh Bank data showed.
The world's second major economy can be emerging as an export destination for Bangladesh.
Bangladesh receives 5-6 lakh tourists yearly and of them a major portion originates from China.
"There are several uncertainties about the COVID-19, including its monetary impression," said ADB Chief Economist Yasuyuki Sawada found in a statement.
This requires the consumption of multiple scenarios to supply a clearer picture of potential losses.
"We hope this examination can support governments because they prepare clear and decisive responses to mitigate the individual and economic impacts of this outbreak," he added.
The brand new coronavirus disease, now referred to as COVID-19, was first discovered in Wuhan, in China in early January. Since that time, it has pass on to some other 88 countries by Friday, based on the World Health Organisation.
The ADB analysis explored three scenarios given the large uncertainties.
In the best-case scenario, the outbreak is contained fairly quickly, with travel bans and precautionary behaviour abating after 8 weeks, when the outbreak intensified and quarantines along with travel and other limitations were imposed.
In the moderate scenario, the outbreak is more widespread and lasts longer, with travel bans and precautionary behaviour abating simply after three months; there exists a bigger decline in China's intake progress of 2 percentage details for the year, in accordance with a no-outbreak scenario.
In the worse-case scenario, the outbreak is even more protracted, with precautionary behaviour and restrictive policies remaining in place for half a year; there is a sizable decline in both intake and investment growth in China, with both down by 2 percentage points in accordance with a no-outbreak scenario.
In the hypothetical worst-case scenario, the duration of travel bans and sharp decline in domestic demand will be half a year in China and the outbreak in other developing economies lasting three months.
In such cases, you will have 2 percentage tips decline in China's consumption relative to no-outbreak situation, China's investment in accordance with no-outbreak scenario and decline in decided on developing economies' domestic consumption.
In the best case scenario, the country's GDP will eventually lose $8.37 million and there may also be job cuts for 1,870 people. In the average and worse cases, you will see GDP loss of $15.84 million and $30.31 million and job cuts of 3,790 and 6,950 respectively.
"These shouldn't be interpreted as a prediction an outbreak will occur in virtually any of the economies. In almost all of these economies there are extremely few cases of the COVID-19," the ADB said.
Rather, they are designed to guide policy-makers found in identifying how costly an outbreak could be, so they can properly evaluate the benefits and costs of prevention and early response.
In Bangladesh, tourism revenues will decline by 0.001 % in the best-case scenario, 0.002 per cent found in the moderate case scenario and 0.003 per cent in the worst-case scenario.
The range of scenarios explored by the ADB recommend a global impact of $77 billion to $347 billion, or 0.1 % to 0.4 % of global GDP, with a moderate case estimate of $156 billion or 0.2 per cent of global GDP.
Two-thirds of the impression falls on China.
The magnitude of the impact of the lethal, pneumonia-like virus, which is sweeping the globe, on Bangladesh's international trade of Bangladesh together with overall commerce -- can't be ascertained yet.
In fact, the true impact would be apparent in March, the finance ministry of Bangladesh stated in a file recently.
"There is absolutely no doubt that there will be at least short-term influence. And if the outbreak persists for some time, this will have far-reaching impact not merely on Bangladesh but also on the global market."
The barriers to imports from China, the epicentre of the virus, will hurt the export-oriented sectors and disrupt the source chain, the finance ministry said, adding that the overall trade may be damaged to some extent as a result of the coronavirus.
