COVID-19 surge slows economic recovery
Lower growth outlook for 2021 in developing Asia, Asian Development Bank says
MANILA – The Asian Development Bank (ADB) sees a 78.2% economic growth for developing Asia this year, slightly lower than the 7.3% forecast in April, due to a surge in coronavirus disease (COIVID-19) outbreaks that reduced the recovery in some economies in the region. The growth outlook for 2022 is upgraded to 5.4% from 5.3%.
In a statement, the ADB said excluding the newly industrialized economies of Hong Kong, China, the Republic of Korea, Singapore, and Taipei, China, the updated outlook is 7.5% this year and 5.7% in 2022 compared to earlier projections of 7.7% and 5.6% respectively.
The supplement to ADB’s flagship publication, Asian Development Outlook (ADO) 2021, features updated projections for the region’s economies and inflation levels during the COVID-19 pandemic.
“Asia and the Pacific’s recovery from the COVID-19 continues, although the path remains precarious amid renews outbreaks, new virus variants, and an uneven vaccine rollout,” said ADB Chief Economist Yasuyuki Sawada. He added on top of containment and vaccination measures, phased and strategic rejuvenation of economic activities, trade, manufacturing and tourism, will remain keys to ensure that the recovery will be green, inclusive and resilient.
The COVID-19 pandemic remains the biggest challenge to the outlook, with outbreaks reported across the region. Daily confirmed cases in the region peaked at about 434,000 in mid-May ad narrowed to about 109,000 at the end of June, concentrated mainly in South Asia, Southeast Asia, and the Pacific. Vaccine rollout in the region has gained phase with 41.6 doses administered over 100 people by the end of June, way about the 39.2 average but below rates of 97,6 in the United States and 81.1 in the European Union.
East Asia’s growth outlook for 2021 is raised to 7.5% from 7.4 in April, amid a stronger-than-expected recovery by newly industrialized economies of Hong Kong, China, the Republic of Korea, and Taipei, China. The subregional growth forecast for 2022 is retained at 5.1%. The growth outlook for the People’s Republic of China is maintained at 8.1% this year and 5.5 percent in 2022, despite the steady performances by industry, exports, and services.
This year’s growth outlook for Central Asia has been increased to 3.6% from 3.4% in the April forecast. This is because of an improved outlook for Armenia, Georgia, and Kazakhstan, the subregion’s largest economy. Central Asia’s outlook for 2022 remains at 4.0%.
Meanwhile, projections for South Asia, Southeast Asia and the Pacific for 2021 are lowered as outbreaks are met with containment measures and restrictions, hampering economic activity. South Asia’s growth outlook for this year has been lowered to 8.9% from 9.5%. The forecast for India has been downgraded by 1.0 percentage point to 10.0%. Southeast Asia’s 2021 outlook has been revised to 4.0% from 4.4%, while the projection for Pacific economies has been lowered to 0.3% from 1.4%. However, the ADB said the 2022 growth forecasts for these sub regions are upgraded to 7.0%, 5.2% and 4.0%, respectively.
The inflation forecast for Asia and the Pacific this year has been raised to 2.4% from 2.3% in April which reflects the rising oil and commodity prices. The projection for 2022 continues at 2.7%. (Melo M. Acuña)
ADB Chief Economist Yasuyuki Sawad. (ADB File Photo)