The fallout from the deadly Ebola pandemic in West Africa will push Guinea and Sierra Leone into recession next year, the World Bank has said.
With the disease still not under control, the cost to the two countries plus less-impacted Liberia of shuttered businesses and curtailed investment will run “well over” $2bn in 2014-2015, the bank said in a new report on Tuesday.
Governments in the three countries, where most of the nearly 7,000 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.
For this year, gross domestic product growth estimates in Liberia were projected to fall to 2.2 percent, compared to forecasts of 2.5 percent in October and 5.9 percent pre-crisis.
In Sierra Leone, 2014 growth was now forecast at 4 percent, down from previous estimates of 8 percent in October and 11.3 percent pre-crisis, the World Bank said.
It lowered its 2014 growth forecast for Guinea to 0.5 percent, compared with 2.4 percent in October and 4.5 percent pre-crisis. It said all three countries had been growing rapidly in recent years and through the first half of 2014.
The bank added that, for 2015, it was projecting negative growth of minus 2.0 percent in Sierra Leone, down from a 7.7 percent growth forecast in October and 8.9 percent before the crisis. It also forecast negative 2015 growth for Guinea of minus 0.2 percent versus October’s estimate of 2 percent growth and a pre-outbreak forecast of 4.3 percent.
“In Liberia, where there are signs of progress in containing the epidemic and some increasing economic activity, the updated 2015 growth estimate is 3.0 percent, an increase from 1.0 percent in October, but still less than half the pre-crisis estimate of 6.8 percent,” the bank said.
The report comes as the World Bank Group’s president, Jim Yong Kim, begins a two-day visit to West Africa to discuss ways of addressing the outbreak.
“This report reinforces why zero Ebola cases must be our goal,” Kim said in a statement. “While there are signs of progress, as long as the epidemic continues, the human and economic impact will only grow more devastating.”