Regional development bank says recovery dependent on how COVID-19 pandemic unfolds
Developing Asia’s economic revival is “underway” but the extent depends on global recovery and how the COVID-19 pandemic unfolds, the Asian Development Bank (ADB) said on Wednesday.
“The region’s growth is forecast to rebound to 7.3% in 2021, moderating to 5.3% in 2022,” it said in its Asia’s Development Outlook 2021 report. “Excluding high-income newly industrialized economies, growth of 7.7% is forecast for this year and 5.6% for next year.”
It said that the region’s economy shrank by 0.2% last year due to coronavirus.
“The worst may be over for developing Asia,but the threat of recurrent COVID-19 outbreaks still casts a pall. The recovery paths of economies across the region will diverge, with those able to contain the virus and its variants set for robust growth, and those less equipped to control the disease having to face prolonged weakness,” said ADB President Masatsugu Asakawa.
According to the forecast, inflation in regional economies “will remain generally benign.” “Average inflation in the region is forecast to fall from 2.8% in 2020 to 2.3% in 2021.”
The publication said that economic risks are tilted to the “downside and depend mainly on how the COVID-19 pandemic unfolds.”
“Significant new outbreaks or delayed vaccine rollouts could prolong disruptions to mobility and economic activity, deepening the crisis in some economies.”
It said that geopolitical tensions, production bottlenecks, limited vaccine effectiveness, and financial turmoil from tightening financial conditions can also impact the economic recovery.
About the effect on education in the region, the report said: “In a quarter of the region’s economies, schools were closed for 200–300 days, and in another fifth for a year or more. Only a handful of economies managed to keep schools open continuously.”
Referring to remote learning strategies deployed in most economies, the report noted constraints such as access to computers and the internet. “This has limited their ability to learn when at home,” it said.
During a virtual event after the release, ADB expert Lei Lei Song insisted on the digital transformation of economies and other infrastructure.
The ADB president said “strong recoveries in China and India” will aid the economic recovery. The report predicted China’s economy to grow 8.1%, India 11%, and Bangladesh 6.8% this year.
“Most of the other economies will experience less vibrant growth. With the global economy still gathering momentum and vaccine distribution programs in their early stages, small economies that are highly dependent on tourism will continue to be the most vulnerable,” he added.