ADB announces $20 billion aid package for member nations

Asian Development Bank (ADB) has announced a massive aid package of $20 billion for the developing member states to cope with the economic devastation caused by the coronavirus. Pakistan is also a member state of this bank and PM Imran Khan was the first head of the state who had formally demanded that UN and international financial institutions should create loans and debt write offs for developing nations to help them fight the challenges in the wake of Corona pandemic.

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The Asian Development Bank said Monday it will roll out a massive $20 billion package to help developing member nations weather the economic fallout from the coronavirus pandemic.

The fund represents the tripling of a package announced just a month ago, which the ADB decided to boost as the scale of the contagion’s impact has mushroomed.

Nearly simultaneous shutdowns across the global economy, with workers ordered to hunker down at home against the virus, have set the stage for a deep recession.

According to the gloomiest scenario presented by the bank, the impact of the “worst pandemic in a century” will be as high as $4.1 trillion, or 4.8 percent of global gross domestic product (GDP). However, even this forecast could turn out worse given the impact of the outbreak on global supply chains and how long it will take to contain the virus.

“The estimated impact could be an underestimate, as additional channels such as supply disruptions, interrupted remittances, possible social and financial crises, and long-term effects on health care and education are excluded from the analysis,” reads the Asian Development Outlook (ADO) 2020, the ADB’s annual economic report.

Officially reported COVID-19 cases worldwide have topped 1.8 million and claimed around 115,000 lives globally.

“The scope and the scale of the crisis make it imperative for the ADB to expand its support,” bank president Masatsugu Asakawa said in a video statement.

Up to $13 billion in loans will be made available to help virus-hit developing members fill in budget gaps, with another roughly $2 billion set for the private sector.

Read more: Global economy badly hit by pandemic: Asian Development Bank

Developing members of the bank range from Afghanistan and Myanmar to India and China.

The ADB warned earlier this month the pandemic could cost the global economy $4.1 trillion as it ravages the United States, Europe and other major economies.

Markets have been sent spinning as traders fret over the crisis’s long-term impact, though governments and central banks have stepped in to ease the pain, pledging trillions to prop up economies.

AFP with additional input from GVS News Desk.