DHAKA, Dec 10, 2020 (BSS) – The growth of Asia will rebound to 6.8 percent in 2021, but output will remain below what was envisioned before the COVID-19 pandemic.
The overall forecast for Developing Asia (46 ADB member economies across Asia and the Pacific) is a contraction of 0.4 percent in 2020, less than the 0.7 percent envisaged in September, said the “Asian Development Outlook (ADO) 2020 Supplement: Paths Diverge in Recovery from the Pandemic.”
The ADO said projected 2020 growth in East Asia is upgraded from 1.3 percent to 1.6 percent. Growth in 2021 is still forecast at 7.0 percent. The earlier South Asia forecast of 6.8 percent contraction in 2020 is upgraded to 6.1 percent, and growth of 7.2 percent is expected in 2021.
The report said economic activity in Bangladesh has recovered more strongly than expected with both exports and remittances growing in recent months but threatened by external risks as COVID-19 outbreaks renew in major export destinations.
In Southeast Asia, contraction of 4.4 percent is now expected in 2020 (previously 3.8 percent) and growth in 2021 is anticipated at 5.2 percent instead of 5.5 percent. Central Asia is still projected to contract by 2.1 percent this year, and the Pacific economies by 6.1 percent.
The report highlighted that China’s GDP to grow by 2.1 percent in 2020 and 7.7 percent in 2021 while India’s GDP to contract by 8 percent in 2020.
Among the major highlights of the report, projected growth in East Asia in 2020 is upgraded from 1.3 percent to 1.6 percent China recovers more quickly than expected. Growth in 2021 is still forecast at 7.0 percent.
The earlier South Asia forecast for 6.8 percent contraction is upgraded to 6.1 percent in line with an improved projection for India, as recovery accelerates, from 9.0 percent contraction to 8.0 percent. Growth will return in 2021, at 7.2 percent in South Asia and 8.0 percent in India.
Recovery in Southeast Asia continues to lag as virus containment efforts in the larger economies hamper economic activity. Subregional forecasts are downgraded for 2020 from 3.8 percent contraction to 4.4 percent and for 2021 from 5.5 percent growth to 5.2 percent.
Growth forecasts for Central Asia and the Pacific are unchanged from September. Central Asia is still projected to contract by 2.1 percent this year, and the Pacific economies by 6.1 percent as global tourism continues to languish.
Depressed demand and low oil prices will keep regional inflation in check at 2.8 percent in 2020 and 1.9 percent in 2021.