The World Bank warns that Ebola is wreaking economic havoc on the West African countries worst hit by the pandemic. In a new report, the bank is calling for swift international action to mitigate the damage.
While it’s impossible to put a price on the nearly 6,000 lives already lost to Ebola, the World Bank on Tuesday published an estimate of the measurable economic impact of the outbreak. In a new report, it warned that the outbreak could cost the three worst-hit countries – Guinea, Liberia and Sierra Leone – more than $2 billion (1.61 billion euros) in lost income over the 2014-15 period.
The new report paints a decisively bleaker picture of the economic calamity facing the region if the virus is not contained soon, than the cautiously optimistic analysis the bank released only two months ago.
” [If] the epidemic spreads into neighboring countries, some of which have much larger economies, the cumulative two-year impact could reach US$32.6 billion by the end of 2015—almost 2.5 times the combined 2013 GDP of the core three countries,”
The World Bank lowered its 2014 growth forecast across the board: Growth in Guinea was adjusted to 0.5 percent, compared with 2.4 percent in October and 4.5 percent pre-crisis; Liberia’s GDP was expected to fall to 2.2 percent compared with 2.5 percent in October and 5.9 percent pre-Ebola; and Sierra Leone was now projected at 4 percent, half of October estimates and down from 11.3 percent before the outbreak.
The World Bank also said it expected negative or slower economic growth next year, downgrading forecasts for Guinea to minus 0.2 percent, compared with October’s 2 percent estimate and pre-crisis forecast of 4.3. In Sierra Leone, projected growth was negative at minus 2 percent, down from 7.7 percent in October and 8.9 pre-pandemic.
“In Liberia, where there are signs of progress in containing the epidemic and some increasing economic activity, the updated 2015 growth estimate is 3.0 percent, an increase from 1.0 percent in October, but still less than half the pre-crisis estimate of 6.8 percent,” the report said.
Exacerbating the crisis are pullbacks by foreign investors, as well as a breakdown of tourism, adding to detrimental cutbacks to government spending. The bank warned that the outbreak had triggered a devastating chain reaction: Forgone output, higher fiscal deficits, rising prices, lower real household incomes and greater poverty.
The report called on the international community to double down on efforts to help pull back Guinea, Liberia and Sierra Leone from the brink of economic collapse.
“The swift and coordinated actions of the international community may help limit the impact of this Ebola crisis to an interruption in that trajectory of sustained economic growth rather than a lengthy detour.”
The report comes as World Bank President Kim Yong Kim embarked on a two-day trip to the affected region to discuss ways to combat Ebola.
“While there are signs of progress, as long as the epidemic continues, the human and economic impact will only grow more devastating,” he said.