ADB updates economic forecasts for Asia and the Pacific
The new set of forecasts from the Asian Development Bank stated that Gross domestic product (GDP) will barely grow in the Asia-Pacific region in 2020. Quarantine measures aimed at combating the novel coronavirus pandemic hamper the economic activity and weaken external demand.
In a regular supplement to its annual economic publication, the Asian Development Outlook (ADO) 2020 released in April, the ADB forecasts growth of 0.1 percent for the region this year. This is down from the 2.2-percent forecast released by ADB in April. This would be the slowest growth for the region since 1961. GDP levels next year will remain below what had been forecasted previously and below pre-crisis figures.
“Economies in Asia and the Pacific will continue to feel the blow of the COVID-19 pandemic this year even as lockdowns are slowly eased and select economic activities restart in a ‘new normal’ scenario. While we see a higher growth outlook for the region in 2021, this is mainly due to weak numbers this year, and this will not be a V-shaped recovery. Governments should undertake policy measures to reduce the negative impact of COVID-19 and ensure that no further waves of outbreaks occur,” said ADB Chief Economist Yasuyuki Sawada.
Developing Asia is projected to grow 0.4 percent in 2020 and 6.6 percent in 2021, excluding the newly industrialized economies of Hong Kong, China, the Republic of Korea, Singapore and Taipei.
According to ADB’s report, East Asia is forecasted to grow 1.3 percent in 2020. This is the only subregion to experience growth this year. East Asia’s economic growth will increase to 6.8 percent in 2021. Growth in China is projected at 1.8 percent in 2020 and 7.4 percent in 2021.
South Asia, which was hit hard by the global pandemic, is predicted to shrink by 3 percent compared to 4.1 percent growth predicted by ADB in April. Growth prospects for the region for 2021 are revised from 6 percent to 4.9 percent. India’s economy is forecasted to decrease by 4 percent in the fiscal year 2020.
“The COVID-19 pandemic prompts a downward adjustment to the 2020 projection for Central Asia from 2.8 percent growth to 0.5 percent contraction,” the Asian Development Outlook 2020 Supplement stated. Analysts say that this contraction is due to trade disruptions and low oil prices. Central Asia’s economic growth is projected to recover to 4.2 percent in 2021.