Manila: Asia’s developing economies are set to grow just 0.1 per cent in 2020, their lowest growth rate since 1961, due to the impact of the COVID-19 pandemic, although growth is set to recover to 6.2 per cent in 2021, the Asian Development Bank said in estimates released on Thursday.
In a supplement to its Annual Economic Outlook 2020, the Manila-based Bank has further reduced its growth projections compared to the original outlook in April, when it had predicted that the 45 developing economies in the Asia-Pacific region would grow by 2.2 per cent this year, reports Efe news.
“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 enew normal’ scenario.
“While we see a higher growth outlook for the region in 2021, this is mainly due to weak numbers this year,” ADB Chief Economist Yasuyuki Sawada said in a statement on Thursday.
Sawada stressed the need for governments to take more ambitious policy measures to soften the economic impact of the pandemic and prevent fresh outbreaks.
The ADB estimated the Chinese economy, the second biggest in the world and the largest regional heavyweight, to grow at 1.8 per cent, down from the earlier projection of 2.3 per cent, partly also due to the negative impact of its long-standing trade war with the US.
East Asia is the only region expected to witness positive growth in 2020, although the forecast has been reduced to 1.3 per cent from the 2 per cent published in April.
However, Hong Kong’s troubles are expected to continue with the ADB predicting a 6.5 per cent contraction in its GDP.
Meanwhile India’s GDP is expected to contract by 4 per cent, as part of a regional trend with South Asia predicted to register a 3 per cent contraction, a drastic slump compared to the 4.1 per cent growth predicted in the April outlook.
The developing economies of Southeast Asia, Central Asia and the Pacific are expected to contract by 2.7 per cent, 0.5 per cent and 4.3 per cent, respectively, during the current year.
Due to falling demand and a slump in oil prices, inflation in Developing Asia would is set to drop to 2.9 per cent in 2020 and 2.4 per cent in 2021.