"Growth in Asia is expected to stall at zero per cent in 2020," said Chang Yong Rhee, Director of the IMF's Asia and Pacific Department.
"This is the worst growth performance in almost 60 years, including during the global financial crisis (4.7 per cent) and the Asian financial crisis (1.3 per cent). Asia still looks to fare better than other regions in terms of activity," he told a virtual news briefing conducted with live webcast on Wednesday (local time).
"This is a crisis like no other. It is worse than the global financial crisis and Asia is not immune. While there is huge uncertainty about 2020 growth prospects, and even more so about the 2021 outlook, the impact of the coronavirus on the region will -- across the board -- be severe and unprecedented," said Rhee.
Policymakers must offer targeted support to households and firms hardest-hit by travel bans, social distancing policies and other measures aimed at containing the pandemic, he said.
This is a real economic shock and requires protecting people, jobs, and industries directly. "This is not a time for business as usual. Asian countries need to use all policy instruments in their toolkits."
The global economy is expected to contract in 2020 by 3 per cent -- the worst recession since the Great Depression. This is a synchronised contraction, a sudden global shutdown. Asia's key trading partners are expected to contract sharply, including the United States by 6 per cent and Europe by 6.6 per cent.
China's growth is projected to decline from 6.1 per cent in 2019 to 1.2 per cent in 2020. This sharply contrasts with China's growth performance during the global financial crisis, which was little changed at 9.4 per cent in 2009 thanks to the important fiscal stimulus of about 8 percent of GDP.
"We cannot expect that magnitude of stimulus this time, and China will not help Asia's growth as it did in 2009," said Rhee.
The pandemic is also affecting financial markets and how they function. "Monetary policy should be used wisely to provide ample liquidity, ease the financial stress of industries and small and medium-sized enterprises, and, if necessary, relax macroprudential regulations temporarily."
External pressures need to be contained. Where needed, said Rhee, bilateral and multilateral swap lines and financial support from the multilateral institutions should be sought. In the absence of swap lines, foreign-exchange market interventions and capital controls may be the alternatives.
"Targeted support, combined with domestic demand stimulus in recovery, will help to reduce scarring, but it needs to reach people and smaller firms," said Rhee.
( With inputs from ANI )