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Fresh COVID-19 wave in Asia Pacific threatens global economic recovery

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While global efforts to contain the Coronavirus pandemic have intensified across the world, the Asia Pacific region is witnessing an unprecedented rise in fresh infections. In July, China witnessed a sharp rise in domestic Coronavirus infections weeks after the country declared containment of the outbreak. According to data compiled by John Hopkins University, Australia and Japan are also facing a second wave of infections.

Meanwhile, other Asia Pacific countries including Indonesia, Philippines, and India have not yet reached the peak of their first wave of the pandemic. India recently became the third-worst pandemic-hit country after the US and Brazil as it recorded more than 1 million infected cases.

Health authorities have also suggested new Coronavirus cases and fatalities in several Southeast Asian countries with a warning that it could take weeks before the new wave is contained.

It is important to note that the global economy experienced its worst downturn since World War II due to the preventive measures imposed by governments to combat the Coronavirus crisis. At a time when governments are resuming their economies to kickstart post-pandemic recovery, a resurgence of infections across the Asia-Pacific region appears to be a warning sign and potential threat for the rest of the world.

While efforts are being taken to develop a viable vaccine for COVID-19 across several countries, governments are taking steps to revive their battered economies across the region. However, noticeable economic recovery largely depends on the business operations of various sectors including tourism, manufacturing, and IT. Goldman Sachs Group Inc. has warned that the Asia-Pacific economies are reopening slowly amid major challenges looming upon the region.

Reportedly, Asia-Pacific economies have accounted for more than 70% of global growth in the year 2019. The Asian Development Bank (ADB), in its June 2020 report, stated that developing Asia-Pacific economies will witness its weakest growth this year in nearly six decades due to the measures to contain the virus transmission.’Developing Asia, a group of 45 countries in the Asia-Pacific region, is expected to post growth of just 0.1 percent in 2020′, the ADB said in its report.

In a recent online conference, former Indian central banker Raghuram Rajan also asserted that even when everything goes planned, the earliest economies will probably come back to full operation in the second or third quarter of next year.

Apparently, the US is also experiencing a surge in Coronavirus cases which has reportedly begun to dent the economic recovery in the region. Federal Reserve head Jerome Powell recently said that an increase in virus cases and the renewed measures to control it have started to weigh on the country’s economic activity.

In the early days of the pandemic crisis, economists anticipated a quick V-shaped recovery. However, after more than four months of battling the virus, a V-shaped post-pandemic recovery appears like a distant dream with a number of countries failing to even manage the outbreak. According to projections by the International Monetary Fund, the global economy at the end of 2021 will be barely larger than it was at the end of 2019.

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