For the first time in 60 years, Asia's economic growth this year will grind to a halt as the coronavirus crisis takes an "unprecedented" toll on the region's service sector and major export destinations, the International Monetary Fund said on Thursday.
Asia's economy is likely to suffer zero growth this year for the first time in 60 years, the IMF said in a report on the Asia-Pacific region.
Changyong Rhee, director of the IMF's Asia and Pacific Department, said that policymakers must offer targeted support to households and firms hardest-hit by travel bans, social distancing policies and other measures aimed at containing the spread of COVID-19.
"These are highly uncertain and challenging times for the global economy. The Asia-Pacific region is no exception. The impact of the coronavirus on the region will be severe, across the board, and unprecedented," Rhee told a virtual news briefing conducted with a live webcast.
"This is not a time for business as usual. Asian countries need to use all policy instruments in their toolkit," he added.
While Asia is set to fare better than other regions that are suffering economic contractions, the projection is worse than the 4.7 percent average growth rates throughout the global financial crisis (in 2009), and the 1.3 percent increase during the Asian financial crisis in the late 1990s, the IMF said.
On an assumption that the pandemic containment policies succeed, the IMF expects a 7.6 percent expansion in Asian economic growth next year but added the outlook was highly uncertain.
The international organisation said that unlike the global financial crisis triggered by the collapse of Lehman Brothers in 2008, the pandemic was directly hitting the region's service sector by forcing households to stay home and shops to shut down.