ADB downgrades Asian projections on renewed outbreaks of Covid-19

MANILA: The Asian Development Bank (ADB) is projecting 7.2 per cent economic growth for  developing Asia this year, compared with its 7.3 per cent forecast in April, as the renewed coronavirus disease (Covid-19) outbreaks slow the recovery in some economies in the region. The growth outlook for 2022 is upgraded to 5.4 per cent from 5.3 per cent.

Excluding the newly industrialised economies of Hong Kong, China; the Republic of Korea; Singapore; and Taipei, China, developing Asia’s updated growth outlook is 7.5 per cent for 2021 and 5.7 per cent for 2022, compared with the earlier projections of 7.7 per cent and 5.6 per cent, respectively.

The supplement to the ADB’s flagship economic publication, the Asian Development Outlook (ADO) 2021, provides updated projections for the region’s economies and inflation levels amid the Covid-19 pandemic.

“Asia and the Pacific’s recovery from the Covid-19 pandemic continues, although the path remains precarious, amid renewed outbreaks, new virus variants, and an uneven vaccine rollout,” ADB chief economist Yasuyuki Sawada said.

“On top of containment and vaccination measures, phased and strategic rejuvenation of economic activities, for instance, trade, manufacturing, and tourism, will be key to ensure that the recovery is green, inclusive, and resilient.”

The Covid-19 pandemic remains the biggest risk to the outlook, as outbreaks continue in many economies. Daily confirmed cases in the region peaked at around 434,000 in the middle of May.

They narrowed to around 109,000 at the end of June, concentrated mainly in South Asia, Southeast Asia, and the Pacific. Meanwhile, the vaccine rollout in the region is gaining pace, with 41.60 doses administered/100 people by the end of June, above the global average of 39.20, but below rates of 97.60 in the United States and 81.80 in the European Union.

East Asia’s growth outlook for 2021 is raised to 7.5 per cent, from 7.4 per cent in April, amid a stronger-than-expected recovery by the newly-industrialised economies of Hong Kong, the Republic of Korea; and Taiwan. The subregional growth forecast for 2022 is retained at 5.1 per cent. The growth outlook for the People’s Republic of China is likewise maintained at 8.1 per cent this year and 5.5 per cent in 2022, amid steady performances by industry, exports, and services.

This year’s growth outlook for Central Asia has been raised to 3.6 per cent, from 3.4 per cent in the April forecast. This is mainly due to an improved outlook for Armenia, Georgia, and Kazakhstan, the sub-region’s largest economy. Central Asia’s outlook for 2022 remains at 4 per cent.

Projections for South Asia, Southeast Asia, and the Pacific for 2021 are lowered, as renewed outbreaks are met with containment measures and restrictions, hampering economic activities.

South Asia’s growth outlook for the fiscal year 2021 is lowered to 8.9 per cent from 9.5 per cent. The forecast for India is downgraded by one percentage point to 10 per cent. Southeast Asia’s 2021 outlook is revised to 4 per cent from 4.4 per cent, while the projection for Pacific economies is lowered to 0.3 per cent from 1.4 per cent.

However, the 2022 growth forecasts for these sub-regions are upgraded to 7 per cent, 5.2 per cent, and 4 per cent, respectively.

The inflation forecast for Asia and the Pacific this year is raised to 2.4 per cent, from 2.3 per cent in April, reflecting the rising oil and commodity prices. The projection for 2022 remains at 2.7 per cent.

Also Read

Asian Development Bank approves $200 m loan to support Philippine

The Asian Development Bank (ADB) today approved a $200 million loan to...