'Developing Asia' to Shrink for First Time in Nearly Six Decades: ADB (Reuters)
Last Modified: 09:30 PM, Mon Sep 14, 2020

By Karen Lema

15 September 2020

Word Count: 723

The pandemic will cause economic output in "developing Asia" to shrink for the first time in nearly six decades in 2020 before it bounces back next year, the Asian Development Development Bank said today. "Developing Asia", which groups 45 countries in Asia-Pacific, is expected to contract 0.7% this year, the ADB said, forecasting the first negative quarterly figure since 1962. The ADB's previous forecast in June had reckoned on 0.1% growth. For 2021, the region is forecast to recover and grow 6.8%, still below pre-COVID-19 predictions, the ADB said. The updated forecasts show the damage brought by the pandemic was greater than previously thought, with about three-quarters of the region's economies forecast to slump this year. "The economic threat posed by the COVID-19 pandemic remains potent, as extended first waves or recurring outbreaks could prompt further containment measures," ADB Chief Economist Yasuyuki Sawada said.

    * Developing Asia to contract for the first time since 1962
    * China to buck trend as ADB kept its 2020 growth forecast 
    * Latest projects suggest "L"-shaped recovery for the region

    By Karen Lema
    MANILA, Sept 15 (Reuters) - The coronavirus pandemic will
cause economic output in "developing Asia" to shrink for the
first time in nearly six decades in 2020 before it bounces back
next year, the Asian Development Development Bank said on
Tuesday. 
    "Developing Asia", which groups 45 countries in
Asia-Pacific, is expected to contract 0.7% this year, the ADB
said, forecasting the first negative quarterly figure since
1962. The ADB's previous forecast in June had reckoned on 0.1%
growth. 
    For 2021, the region is forecast to recover and grow 6.8%, 
still below pre-COVID-19 predictions, the ADB said in an update
of its Asian Development Outlook report.
    The updated forecasts show the damage brought by the
pandemic was greater than previously thought, with about
three-quarters of the region's economies forecast to slump this
year.  
    "Most economies in the Asia and Pacific region can expect
difficult growth path for the rest of 2020," ADB Chief Economist
Yasuyuki Sawada said in a statement. 
    "The economic threat posed by the COVID-19 pandemic remains
potent, as extended first waves or recurring outbreaks could
prompt further containment measures," Sawada said. 
    While the pandemic remains the biggest downside risk to the
region's outlook, Sawada said in a separate media briefing
"worsening geopolitical tensions" that include the trade and
tech war between U.S. and Beijing, could also dent growth.  
    China, where the coronavirus surfaced in December, is seen
bucking the trend as the ADB kept its 2020 growth forecast at
1.8%. The world's second largest economy is expected to rebound
strongly to 7.7% in 2021, the ADB said.
    India's economy is expected to contract 9.0% this year, ADB
said, a far worse outcome than the 4.0% contraction previously
forecast, ADB said. But it also expected India to bounce back
with 8.0% growth next year.    
    As the pandemic took a toll on Southeast Asian economies,
the sub-region is projected to suffer a 3.8% slump this year,
before picking up next year.    
    Latest forecasts suggest a more protracted "L" shaped
recovery for "developing Asia", Sawada said.
    Depressed demand and lower oil prices allowed the ADB to
keep its inflation forecast for developing Asia at 2.9%, and it
is predicted to slow further to 2.3% in 2021.


 GDP GROWTH                                             
              2019  2020  2020  2020  2020  2021  2021  2021
                    DEC   APR   JUNE  SEPT  APR   JUNE  SEPT
 Central      4.9   4.5   2.8   -0.5  -2.1  4.2   4.2   3.9
 Asia                                                   
 East Asia    5.4   5.2   2.0   1.3   1.3   6.5   6.8   7.0
 China        6.1   5.8   2.3   1.8   1.8   7.3   7.4   7.7
                                                          
 South Asia   4.3   6.1   4.1   -3.0  -6.8  6.0   4.9   7.1
 India        4.2   6.5   4.0   -4.0  -9.0  6.2   5.0   8.0
                                                          
 SEast Asia   4.3   4.7   1.0   -2.7  -3.8  4.7   5.2   5.5
 Indonesia    5.0   5.2   2.5   -1.0  -1.0  5.0   5.3   5.3
 Malaysia     4.3   4.7   0.5   -4.0  -5.0  5.5   6.5   6.5
 Myanmar      6.8   n/a   4.2   1.8   1.8   6.8   6.0   6.0
 Philippines  6.0   6.2   2.0   -3.8  -7.3  6.5   6.5   6.5
 Singapore    0.7   1.2   0.2   -6.0  -6.2  2.0   3.2   4.5
 Thailand     2.4   3.0   -4.8  -6.5  -8.0  2.5   3.5   4.5
 Vietnam      7.0   6.8   4.8   4.1   1.8   6.8   6.8   6.3
                                                          
 The Pacific  3.7   2.5   -0.3  -4.3  -6.1  2.7   1.6   1.3
 Developing   5.1   5.2   2.2   0.1   -0.7  6.2   6.2   6.8
 Asia                                                   
                                                          
                                                          
                                                          
  INFLATION                                               
              2019  2020  2020  2020  2020  2021  2021  2021
                    DEC   APR   JUNE  SEPT  APR   JUNE  SEPT
                                                        
 Central      7.5   7.3   7.6   8.0   8.3   6.3   6.6   6.6
 Asia                                                   
 East Asia    2.6   2.7   3.2   2.9   2.6   1.8   1.8   1.7
 China        2.9   3.0   3.6   3.3   3.0   1.9   1.9   1.8
                                                          
 South Asia   5.0   4.8   4.1   4.0   5.2   4.4   4.5   4.5
 India        4.8   3.8   3.0   3.0   4.5   3.8   4.0   4.0
                                                          
 SEast Asia   2.1   2.6   1.9   1.0   1.0   2.2   2.3   2.3
 Indonesia    2.8   3.3   3.0   2.0   2.0   2.8   2.8   2.8
 Malaysia     0.7   2.0   1.0   -1.5  -1.5  1.3   2.5   2.0
 Myanmar      8.6   n/a   7.5   6.0   6.0   7.5   6.0   6.0
 Philippines  2.5   3.0   2.2   2.2   2.4   2.4   2.4   2.6
 Singapore    0.6   0.9   0.7   -0.2  -0.3  1.3   0.8   1.0
 Thailand     0.7    1    -0.9  -1.3  -1.6  0.4   0.7   0.8
 Vietnam      2.8   3.5   3.3   3.0   3.3   3.5   3.5   3.5
                                                          
 The Pacific  3.0   3.3   2.7   2.9   2.8   3.8   3.8   3.1
 Developing   2.9   3.1   3.2   2.9   2.9   2.3   2.4   2.3
 Asia                                                   
 
    
    

 (Reporting by Karen Lema; Editing by Simon Cameron-Moore)
 
Powered by InfoDesk
RIS
InfoDesk Inc
Article Info
Dateline: MANILA, Sept 15 (Reuters)
Creditline: Reuters
Slugline: HEALTH-CORONAVIRUS/ADB-ECONOMY