Asia set for prolonged economic recovery period
Warning of a difficult growth path for most economics in the Asia-Pacific region in 2020, the Asian Development Bank (ADB) is forecasting -0.7% GDP growth for developing Asia this year.
This will represent the region’s first negative economic growth since the early 1960s, with about three-quarters of economies expected to post negative growth.
Yasuyuki Sawada, chief economist of the ADB, said, “The economic threat posed by the COVID-19 pandemic remains potent, as extended first waves or recurring outbreaks could prompt further containment measures.
“Consistent and coordinated steps to address the pandemic, with policy priorities focusing on protecting lives and livelihoods of people who are already most vulnerable, and ensuring the safe return to work and restart of business activities, will continue to be crucial to ensure the region’s eventual recovery is inclusive and sustainable.”
Countries like India have been particularly hard-hit, with GDP contracting a record 23.9% in the first quarter of the fiscal year and is forecast to shrink 9% in FY 2020. For countries like China, growth (1.8%) will be modest in 2020, before rebounding to 7.7% in 2021.
Collectively, growth in Asia is expected to rally to 6.8% in 2021, although that will be measured against a weak 2020 performance. This, said the ADB, will leave 2021’s output below pre COVID-19 projections, creating an “L-shaped” rather an “V-shaped” recovery.
The ADB’s Sawada also called on continued policy support to underpin recovery, with the ADB reporting policy support packages amounting to US$3.6 trillion, equivalent to about 15% of regional GDP, having been delivered so far by governments in the region.