Worst-case scenario of coronavirus could see Bangladesh losing $3.02 billion: ADB

The Covid-19 outbreak that started in December last year may cast a dark shadow on Bangladesh's economy.

There can be a sharp fall in domestic demand, tourism and business travel, foreign investment, trade, and production linkages, says a new analysis of the Asian Development Bank (ADB). 

The outbreak can also hit supply chains and human health.

In the worst-case scenario, where the virus lingers for more than six months, Bangladesh would lose $3.021 billion – about 1.1 percent of the country's total economic output. Also, around 0.9 million may lose their jobs.

The ADB finds that business, trade, personal, and public services would be the hardest hit with an estimated loss of $1.141 billion, while the transport services will suffer the least with a loss of $333.56 million.

The magnitude of the economic losses will depend on how the outbreak evolves, which remains highly uncertain. The range of scenarios explored in the ADB analysis suggests a global impact of around 0.1 percent to 0.4 percent of the global gross domestic product (GDP).

The ADB analysis, titled "The Economic Impact of the COVID-19 Outbreak on Developing Asia," finds four possible scenarios. 

In the best-case scenario, the virus continues for two months and in the moderate-case for four months. In the worse-case, the virus continues for six months and in the worst-case more than that.

"There are many uncertainties about Covid-19, including its economic impact," said ADB Chief Economist Yasuyuki Sawada. "This requires the use of multiple scenarios to provide a clearer picture of potential losses."

Bangladesh would lose $30.31 million in the worse-case scenario, $8.37 million in the best-case.

The number rises to $15.84 million in the moderate-case. In this scenario, precautionary behaviours and restrictions such as travel bans start easing after three months of restriction. 

The ADB estimates that developing Asian economies will suffer most compared to the rest of the world. These countries, excluding China, would lose from 0.17 to 0.46 percent of their total GDP.

India is likely to suffer the most among the seven South Asian countries where Afghanistan is not included.

In the worst-case scenario, Pakistan and Bangladesh are the second and third in terms of total losses.

The Maldives would be the most affected country in terms of GDP losses, followed by Sri Lanka, because the Maldives has its highest GDP share from tourism among the South Asian countries as well as the ADB-selected 22 developing Asian economies.

Sri Lanka has the second-highest GDP share from tourism in South Asia.

Maldives would lose 4.96 percent of its total GDP, while Sri Lanka would lose 1.57 percent.

Bhutan would be least likely to suffer in South Asia. In the worst-case scenario, the country would lose $19.43 million or 0.77 percent of its GDP to the coronavirus outbreak.