Developing Asia will barely grow in 2020 as containment measures to address the Covid-19 pandemic hamper economic activity and weaken external demand, according to an updated Asian Development Bank (ADB) report released on Thursday.
In a regular supplement to its annual flagship economic publication, the Asian Development Outlook (ADO) 2020 released in April, ADB forecasts growth of 0.1 per cent for the region in 2020, reports Xinhua.
"This is down from the 2.2 per cent forecast in April and would be the slowest growth for the region since 1961," adds the updated report.
The report further says growth in 2021 is expected to rise to 6.2 per cent, as forecast in April. Gross domestic product (GDP) levels in 2021 will remain below what had been envisioned and below pre-crisis trends, adds the report.
Excluding the newly industrialized economies of China's Hong Kong Special Administrative Region, South Korea, Singapore, and China's Taiwan, the report says developing Asia is forecast to grow 0.4 per cent this year and 6.6 per cent in 2021.
"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," ADB Chief Economist Yasuyuki Sawada said in a statement.
"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," he said, stressing the need for governments to "undertake policy measures to reduce the negative impact of COVID-19 and ensure that no further waves of outbreaks occur."
The updated report says that "risks to the outlook remain on the downside."
East Asia is forecast to grow 1.3 per cent in 2020 while growth in 2021 will recover to 6.8 per cent, according to the report.
Hit hard by Covid-19, South Asia is forecast to contract by 3.0 per cent in 2020, compared to 4.1 per cent growth predicted in April. Growth prospects for 2021 are revised down to 4.9 per cent from 6.0 per cent.
India's economy is forecast to contract by 4.0 per cent in fiscal year (FY) 2020, ending on 31 March 2021, before growing 5.0 per cent in FY 2021.
According to the report, economic activity in Southeast Asia is expected to contract by 2.7 per cent this year before growing by 5.2 per cent in 2021.
Contractions are forecast in key economies as containment measures affect domestic consumption and investment, including Indonesia (-1.0 per cent), the Philippines (-3.8 per cent), and Thailand (-6.5 per cent).
Vietnam is forecast to grow by 4.1 per cent in 2020. "While that is 0.7 percentage points lower than ADB's April estimates, it is the fastest growth expected in Southeast Asia," the report says.
Inflation for developing Asia is forecast at 2.9 per cent in 2020, down from a forecast of 3.2 per cent in April, reflecting depressed demand and lower oil prices. In 2021, it says inflation is expected to ease to 2.4 per cent.