KUALA LUMPUR: The Asian Development Bank (ADB) has revised downwards its 2020 growth forecast for Asia to 0.1% from 2.2% projected in April.
In a statement today, it said the forecast, which will be the slowest growth for the region since 1961, was contained in the bank’s new set of forecasts, a regular supplement to its annual flagship economic publication, the Asian Development Outlook (ADO) 2020, released in April.
The bank lowered its forecast for 2020 as containment measures to address the Covid-19 pandemic have hampered economic activity and weakened external demand.
“Growth in 2021 is expected to rise to 6.2%, as forecast in April. Gross domestic product (GDP) levels in 2021 will remain below what had been envisioned and below pre-crisis trends.
“Excluding the newly industrialised economies of Hong Kong, China; the Republic of Korea; Singapore; and Taipei, China, developing Asia is forecast to grow 0.4% this year and 6.6% in 2021,” it said.
ADB chief economist Yasuyuki Sawada said economies in Asia and the Pacific will continue to feel the blow of the Covid-19 pandemic this year even as lockdowns are slowly easing and select economic activities restart in a ‘new normal’ scenario.
“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. Governments should undertake policy measures to reduce the negative impact of Covid-19 and ensure that no further waves of outbreaks occur,” he added.
ADB said risks to the outlook remain on the downside as the pandemic may see multiple waves of outbreaks in the coming period and sovereign debt and financial crises cannot be ruled out. There is also the risk of renewed escalation in US-China trade tensions.
The ADB said economic activity in Southeast Asia is expected to contract by 2.7% this year before growing by 5.2% in 2021.
Contractions are forecast in key economies as containment measures affect domestic consumption and investment, including Indonesia (-1.0%), the Philippines (-3.8%), and Thailand (-6.5%).
“Vietnam is forecast to grow 4.1% in 2020. While that is 0.7 percentage points lower than ADB’s April estimates, it is the fastest growth expected in Southeast Asia,” it added. -Bernama
