COVID-19 likely to wipe out growth across Asia-Pacific in 2020
Sluggish economic activity and weakened external demand driven by government measures to contain the COVID-19 pandemic will see developing countries in Asia-Pacific struggling to post a mere 0.1% growth in 2020.
While a higher growth outlook can be accepted in 2021, this will be mainly attributed to the weak numbers this year, cautioned the Asian Development Bank (ADB) in a new report.
Yasuyuki Sawada, chief economist of ADB, 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 eased and select economic activities restart in a ‘new normal’ scenario.
“Governments should undertake policy measures to reduce the negative impact of COVID-19 and ensure that no further waves of outbreak occur.”
In South-east Asia, economic activity is expected to contract by 2.7% this year before growing by 5.2% in 2021. As containment measures continue to affect domestic consumption and investment, key economies will contract, including Thailand (-6.5%), Singapore (-6%), Malaysia (-4.0%), and the Philippines (-3.8%).
The silver lining is Vietnam, which is expected to grow 4.1% in 2020, the fastest growth rate in the region. Besides Vietnam, only Myanmar (1.8%) and Brunei (1.4%) are expected to register growth.
One of the hardest hit regions will be South Asia, which is forecast to contract by 3.0% in 2020, before rebounding to 4.9% growth in 2021. India, the region’s largest economy, will contract by 4.0% in FY2020, before growing 5.0% in FY2021.
East Asia is predicted to grow 1.3% in 2020, making it the only sub-region to experience growth this year. China will grow 1.8% this year and 7.4% in 2021, bringing East Asia’s expected growth in 2021 to 6.8%.