Developing Asia to grow just 0.1% in 2020, warns ADB
Developing Asia will barely grow in 2020 as containment measures to address the coronavirus pandemic hamper economic activity and weaken external demand, according to new set of forecasts from the Asian Development Bank.
ADB - in a supplement to its annual Asian Development Outlook 2020 - forecasts growth of 0.1% for the region in 2020 - down from the 2.2% forecast in April. It would represent the slowest growth for the region since 1961. Growth in 2021 is expected to rise to 6.2%, as forecast in April. Gross domestic product levels in 2021 will remain below what had been envisioned and below pre-crisis trends.
Excluding the newly industrialized 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.
East Asia is forecast to grow 1.3% in 2020 - the only subregion to experience growth this year - while growth in 2021 will recover to 6.8%. Growth in the PRC is forecast at 1.8% this year and 7.4% in 2021, compared to the April estimates of 2.3% and 7.3%, respectively.
Hit hard by COVID-19, South Asia is forecast to contract by 3.0% in 2020, compared to 4.1% growth predicted in April. Growth prospects for 2021 are revised down to 4.9% from 6.0%. India’s economy is forecast to contract by 4.0% in fiscal year (FY) 2020, ending on 31 March 2021, before growing 5.0% in FY2021.
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.
Central Asia's economic activity is expected to contract by 0.5% compared to the 2.8% growth forecast in April due to trade disruptions and low oil prices. Growth is forecast to recover to 4.2% in 2021.
