MANILA (Reuters) - The Asian Development Bank is tripling the amount of quick-disbursing loans available to developing member countries in Asia to $20 billion to help them battle the economic and health effects of the coronavirus pandemic, its president said.
President Masatsugu Asakawa said the ADB was adding $13.5 billion to the initial $6.5 billion package it announced last month because the economic impact of the pandemic is expected to be more severe than previously thought.
“It is clear that the scope and scale of this crisis require greater efforts,” Asakawa told Reuters in an interview on Monday.
The increase will allow the Manila-based lender to provide $2 billion to the private sector to support liquidity-starved small and medium enterprises, help companies cope with supply chain disruptions and rejuvenate trade financing, he said.
To ensure faster delivery of support, Asakawa said the ADB would streamline its processes and make its lending terms “much more flexible”.
Growth in developing Asian economies, already slowing, is set to weaken even more sharply this year due to the coronavirus pandemic before bouncing back strongly next year, the ADB said in its Asian Development Outlook report on April 3.
Its baseline forecast called for growth in developing Asia, a group of 45 economies that includes China and India, to slow to 2.2% in 2020 from a previous forecast of 5.2%, which would be the weakest in more than two decades.
To try to halt the spread of COVID-19, governments around the world have implemented draconian containment measures from halting travel to strict stay-at-home orders, hammering the global economy.
The ADB now expects global gross domestic product to shrink between 2.3% to 4.8%, higher than it estimated last month.
Asakawa said it was important to avoid the crisis evolving into a currency and financial crisis.
“Fiscal policy, monetary policy and this kind of policy coordination among ourselves are very much needed for us to survive this very severe and unprecedented challenge,” he said.
More than 1.8 million people have been infected by the novel coronavirus globally and more than 113,000 have died, according to a Reuters tally. Infections have been reported in more than 210 countries and territories since the first cases were identified in China in December 2019.
Reporting by Karen Lema; Editing by Nick Tattersall