Exploring the Growth Effects of COVID-19 across Developing Countries
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World Bank, Washington, DC
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This paper investigates the spread of
the COVID-19 pandemic and its impact on economic growth
across developing countries. It documents the evolution and
co-movement of COVID-19 infections with government responses
(including health containment measures) across developing
countries. It then estimates the impact of the different
channels of transmission of COVID-19 on economic
growth—thus, identifying factors that contribute to the
economic resilience of countries during the pandemic shocks.
The findings show that the pandemic’s impact on the decline
in growth was substantive across the different developing
country groups—although at different rates. The estimates
show that a deeper downturn in economic activity due to the
pandemic can be averted in countries with higher levels of
human capital, well-targeted containment measures, and
improved global health security. Diversifying trade patterns
(across products and markets) is also crucial, and so is
strengthening intraregional trade, as higher commerce across
borders within the different developing regions may help
secure the supply chains of essential goods in times of
crisis—and particularly during pandemics. Finally, having
fiscal space and a less risky public debt profile can make
these economies more resilient against crisis.
Palabras clave
ECONOMIC GROWTH, CONTAINMENT, FISCAL SPACE, GROWTH DRIVERS, CORONAVIRUS, COVID-19, PANDEMIC IMPACT