The COVID-19 pandemic, which is still impacting South Asia, has temporarily brought the region to a near standstill. Governments proactively stabilized activity through monetary easing, fiscal stimulus, and supportive financial regulation, but the situation is fragile amid weak buffers and exhausted policy tools. South Asia’s GDP is expected to contract 7.7 percent this year, by far the largest decline on record, but uncertainty around the forecast is substantial. The informal economy in South Asia has been hit hard. Many unorganized workers, self-employed people and microenterprises have experienced a large drop in earnings as the service sectors that were affected most by the lockdowns are dominated by informality. Informal workers and firms tend to have inadequate mechanisms for coping with short-term demand and supply interruptions due to limited savings and constrained access to finance. While the poor have suffered severely during the crisis, many informal workers in the middle of the income distribution have experienced the greatest drop in earnings. Most of them are not covered by social insurance. The crisis lays bare complicated structural problems in the informal sector that need to be addressed.

After a disappointing 2019, growth prospects in developing Asia have worsened under the impact of the current health crisis. Signs of incipient recovery near the turn of this year were quickly overthrown as COVID-19 broke out in January 2020 in the region’s largest economy and subsequently expanded into a global pandemic. Disruption to regional and global supply chains, trade, and tourism, and the continued spread of the outbreak, leave the region reeling under massive economic shocks and financial turmoil. Across Asia, the authorities are responding with policies to contain the outbreak, facilitate medical interventions, and support vulnerable businesses and households. Assuming that the outbreak is contained this year, growth is expected to recover in 2021. Especially to face down fundamental threats such as the current medical emergency, innovation is critical to growth and development. As some economies in developing Asia challenge the innovation frontier, many others lag. More and better innovation is needed in the region to sustain growth that is more inclusive and environmentally sustainable. Five key drivers of innovation are sound education, productive entrepreneurship, high-quality institutions, efficient financial systems, and dynamic cities that excite knowledge exchange. The journey to creating an innovative society takes long-term commitment and hard work.

The coronavirus disease (COVID-19) pandemic has seen governments across developing Asia move significant amounts of capital into relief efforts that have saved countless lives and livelihoods. But emerging economic recovery packages must not upset the sensitive balance between economic growth and the region’s natural capital. Many global thinkers are advocating the critical role of green infrastructure in supporting economic growth and livelihoods, while safeguarding the Paris Agreement targets. This publication examines green and innovative finance mechanisms that can be incorporated into government recovery strategies to incentivize green infrastructure investment. These mechanisms can play a key role in catalyzing much-needed funds from private capital for a green and sustainable regional recovery.

The world economy is experiencing a very strong but uneven recovery, with many emerging market and developing economies facing obstacles to vaccination. The global outlook remains uncertain, with major risks around the path of the pandemic and the possibility of financial stress amid large debt loads. Policy makers face a difficult balancing act as they seek to nurture the recovery while safeguarding price stability and fiscal sustainability. A comprehensive set of policies will be required to promote a strong recovery that mitigates inequality and enhances environmental sustainability, ultimately putting economies on a path of green, resilient, and inclusive development. Prominent among the necessary policies are efforts to lower trade costs so that trade can once again become a robust engine of growth. This year marks the 30th anniversary of the Global Economic Prospects. The Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). Each edition includes analytical pieces on topical policy challenges faced by these economies.

Developing Asia has suffered as the COVID-19 pandemic persists. Growth, trade, and tourism collapsed in 2020, leading to the region’s first economic contraction in nearly 6 decades. Governments across Asia acted quickly to contain the virus and its economic effects, and signs of bottoming out have now appeared. Inflation remains benign, constrained by depressed demand and declining food prices. A prolonged pandemic is the primary downside risk to the outlook. Persistent or renewed outbreaks and a return to stringent containment could possibly derail the recovery and trigger financial turmoil. Recovery depends on measures to address the health crisis and on continued policy support. The pandemic has highlighted the importance of wellness, both physical and mental. Wellness—the pursuit of holistic health and well-being—is a component of the UN’s Sustainable Development Goals. This report evaluates the state of wellness in Asia, documents how the wellness economy is a large and growing part of the region’s economy, and discusses how policy makers can promote wellness by creating healthy living environments, encouraging physical activity and healthy diets, and enhancing workplace wellness.

The COVID-19 pandemic has, with alarming speed, dealt a heavy blow to an already-weak global economy, which is expected to slide into its deepest recession since the second world war, despite unprecedented policy support. The global recession would be deeper if countries take longer to bring the pandemic under control, if financial stress triggers defaults, or if there are protracted effects on households and firms. Economic disruptions are likely to be more severe and protracted in emerging market and developing economies with larger domestic outbreaks and weaker medical care systems; greater exposure to international spillovers through trade, tourism, and commodity and financial markets; weaker macroeconomic frameworks; and more pervasive informality and poverty. Beyond the current steep economic contraction, the pandemic is likely to leave lasting scars on the global economy by undermining consumer and investor confidence, human capital, and global value chains. Being mostly a reflection of the recent plunge in global energy demand, low oil prices are unlikely to provide much of a boost to global growth in the near term. While policymakers' immediate priorities are to address the health crisis and moderate the short-term economic losses, the likely long-term consequences of the pandemic highlight the need to forcefully undertake comprehensive reform programs to improve the fundamental drivers of economic growth, once the crisis abates. Global Economic Prospects is a World Bank Group Flagship Report that examines global economic developments and prospects, with a special focus on emerging market and developing economies, on a semiannual basis (in January and June). The January edition includes in-depth analyses of topical policy challenges faced by these economies, while the June edition contains shorter analytical pieces.

Conditions in the region and the rest of the world have changed dramatically since the April 2020 Regional Economic Update (World Bank 2020a). In addition to still unfolding unprecedented health crisis, the world is now experiencing the deepest global recession since the Second World War (World Bank 2020b). The global economy is projected to contract by 5.2 percent this year, with output in emerging market and developing economies (EMDEs) shrinking by 2.5 percent—the first contraction in at least sixty years. The COVID-19 pandemic has resulted in a significant loss of life and has had severe economic effects on the developing East Asia and Pacific (EAP) region. Many governments have responded to the pandemic-induced shock with sizable fiscal and monetary support. Although subject to significant uncertainty, regional growth is expected to rebound to [6.6 percent] in 2021 as the pandemic subsides, remaining restrictions are lifted, and global demand recovers. The pandemicinduced crisis will likely hit hardest the poorest and most vulnerable countries and communities, [putting the Sustainable Development Goals (SDGs) further out of reach]. The dynamics of the shock mean that in 2020 the region will experience the widest output gaps in decades. Absent of sift and effective actions, the pandemic will slow potential growth in the region by weakening investment, human capital, and the supply chains that have been an important conduit for productivity gains over the past decade.

Seventeen in a series of annual reports comparing business regulation in 190 economies, Doing Business 2020 measures aspects of regulation affecting 10 areas of everyday business activity.

The share of immigrants in Western and Eastern Europe has increased rapidly over the past four decades. Today, one of every three immigrants in the world goes to Europe. Furthermore, although globally only one-third of migration takes place within regions, intraregional migration is especially high within Europe and Central Asia, with 80 percent of the region's emigrants choosing to move to other countries in the region. In high-income destination countries, migrants are often blamed for high unemployment and declining social services. There are also widespread concerns about brain drain in the migrant sending countries of Eastern Europe, the Western Balkans, and Central Asia. This update focuses on the design of policies on labor mobility and presents the trends, determinants, and impacts of low- and high-skilled labor.

Human capital—the knowledge, skills, and health that people accumulate over their lives—is a central driver of sustainable growth, poverty reduction, and successful societies. More human capital is associated with higher earnings for people, higher income for countries, and stronger cohesion in societies. Much of the hard-won human capital gains in many economies over the past decade is at risk of being eroded by the COVID-19 (coronavirus) pandemic. Urgent action is needed to protect these advances, particularly among the poor and vulnerable. Designing the needed interventions, targeting them to achieve the highest effectiveness, and navigating difficult trade-offs make investing in better measurement of human capital now more important than ever. The Human Capital Index (HCI)—launched in 2018 as part of the Human Capital Project—is an international metric that benchmarks the key components of human capital across economies. The HCI is a global effort to accelerate progress toward a world where all children can achieve their full potential. Measuring the human capital that children born today can expect to attain by their 18th birthdays, the HCI highlights how current health and education outcomes shape the productivity of the next generation of workers and underscores the importance of government and societal investments in human capital. The Human Capital Index 2020 Update: Human Capital in the Time of COVID-19 presents the first update of the HCI, using health and education data available as of March 2020. It documents new evidence on trends, examples of successes, and analytical work on the utilization of human capital. The new data—collected before the global onset of COVID-19—can act as a baseline to track its effects on health and education outcomes. The report highlights how better measurement is essential for policy makers to design effective interventions and target support. In the immediate term, investments in better measurement and data use will guide pandemic containment strategies and support for those who are most affected. In the medium term, better curation and use of administrative, survey, and identification data can guide policy choices in an environment of limited fiscal space and competing priorities. In the longer term, the hope is that economies will be able to do more than simply recover lost ground. Ambitious, evidence-driven policy measures in health, education, and social protection can pave the way for today’s children to surpass the human capital achievements and quality of life of the generations that preceded them.