Hans Timmer, World Bank's Chief Economist for South Asia, interviewed by Suhasini Haidar (The Hindu)
Disruptions in the supply chain and panic buying can lead to price spikes: Hans Timmer
In a report released this month, the World Bank has predicted a ‘dire’ situation for South Asia due to the economic impact of measures to counter the novel coronavirus pandemic, suggesting that the eight SAARC countries (Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, Maldives and Sri Lanka) will experience their worst economic performance in 40 years, with at least half of them falling into a deep recession. In an exclusive interview to The Hindu, the author of the report and Chief Economist for South Asia Hans Timmer says managing migrant returns, service sector revenue losses and ensuring food security for the poorest are major priorities for the region.
* The forecast for the South Asian economy in the WB report, with an expected drop from 6.3% growth to 1.8% - 2.8%. is quite significant. Could the drop be even bigger, given that we don’t yet know when economic activity will be fully reopened?
This forecast already includes many adverse impacts. The upper and lower bounds are based on two scenarios for advanced economies: one with a two-months lockdown of advanced economies, the other with a four-months lockdown of these economies. These scenarios translate for South Asia into sharp declines in exports, disruptions in global value chains, deterioration of investment sentiment, reversal of capital flows, and reduced remittances. Our upper and lower bound forecasts also assume sharp declines in domestic hospitality services. But the drop in growth can indeed be bigger. In the report we mention that we calculated what we call a “worst case scenario”, in which we assume a prolonged lockdown of South Asia economies: an extended lockdown for three months and a more partial lockdown in subsequent quarters. In that case, we ended up with negative growth for the region, a contraction of 1%.
Please click here to access the World Bank report entitled 'South Asia Economic Focus, Spring 2020 : The Cursed Blessing of Public Banks'.
Please click here to read the entire interview.
Image Courtesy: The World Bank, https://www.worldbank.org/en/about/people/h/hans-timmer
The Hindu, 19 April, 2020, https://www.thehindu.com/news/national/coronavirus-preventing-food-shortages-is-a-high-priority-for-south-asia-says-world-bank-economist/article31382013.ece?homepage=true