Ebola brings Guinea, Sierra Leone to brink of recession
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The World Bank said Tuesday that the fallout from the deadly Ebola pandemic will push Guinea and Sierra Leone into recession next year.
With the disease still not under control in West Africa, the cost to the two countries plus less-impacted Liberia of shuttered businesses and curtailed investment will run "well over" $2 billion in 2014-2015, the Bank said in a new report.
Governments in the three countries, where most of the nearly 6,000 deaths from the Ebola outbreak have occurred, have already seen their finances hit to the tune of around $500 million this year.
That has forced cutbacks to official spending for investment and services, on top of pullbacks by foreign investors and visitors frightened by the spread of the virus.
"The epidemic is not yet under control. Containment, combined with a full-fledged financial recovery effort to restart business activity and bring back investors, are now both therefore urgently needed for the region to improve on the downbeat forecasts," the Bank said.
The report revised less dire growth forecasts made only in October, when officials optimistically thought the disease could be controlled by the end of the year.
Liberia's economy is now projected to grow only about 2.2 percent this year, compared to 5.9 percent projected before the outbreak.
More than half of people surveyed in the county say they are no longer working in their latest job, compared to 40 percent in October.
But the economy is now likely to bounce back with a 3.0 percent expansion next year, according to the report.
"The number of new weekly cases of Ebola in Liberia has recently declined and this may explain some incipient signs of economic recovery.
Ebola impact 'devastating'
Sierra Leone is much harder hit, with transmission of the disease still intense. In the first half of this year the economy grew at a 11.3 percent annual pace; in the second half it has contracted at a 2.8 percent rate.
Averaged out, the country will achieve just 4.0 percent growth this year, and is expected to shrink 2.0 percent in 2015. Gross domestic product could lose $900 million fall next year, the report said.
Food production will fall because planting was curtailed in the June-August period; on top of that, heavy rains in September hit the country's rice crop. Equally devastating has been the plunge in iron ore prices, which has hit the country's main export.
In Guinea, growth slowed from a 4.5 percent pre-Ebola pace to 0.5 percent in the second half, and the economy will likely contract 0.2 percent next year, according to the World Bank.
"Commerce and services have been hit by a sharp drop in international travel and regional trade; agricultural and manufacturing exports to neighboring countries have come to a standstill," the report said.
World Bank President Jim Yong Kim, starting a two-day trip to the affected region on Tuesday, said in a statement that the goal remains to reduce the number of Ebola cases to zero.
"While there are signs of progress, as long as the epidemic continues, the human and economic impact will only grow more devastating."