MANILA – The Asian Development Bank (ADB) has warned of “lasting scars” from the coronavirus pandemic as it cuts its 2021 growth forecast for developing Asia on slow vaccination rates, surging infections and crippling lockdowns.
A shortage of doses, which has hampered efforts to inoculate the vast region stretching from the Cook Islands in the Pacific to Kazakhstan in Central Asia, may worsen as evidence of waning vaccine protection increases demand for booster shots, said the lender today.
The Philippines-based ADB has forecast growth of 7.1% – compared with its April prediction of 7.3% and a slight contraction in 2020 – but said recovery “remains fragile”.
Vaccination rates have been uneven across the region, where less than a third of the population was fully protected against Covid-19 at the end of last month, said the bank in an update of its flagship Asian Development Outlook.
This compares with more than 50% coverage in the United States and nearly 60% in the European Union.
ADB warned that delayed vaccine roll-outs and the emergence of new Covid-19 variants are among the biggest risks to the outlook – and could have long-term damaging consequences.
“Income losses caused by the pandemic in particular threaten to leave lasting scars and have a multidimensional effect on regional economies.”
Progress on reducing poverty in developing Asia has been set back “at least two years”, and prolonged school closures will lead to higher-than-expected learning and earning losses.
While the regional economy is expected to expand this year and next, recovery “diverged” in the first half of 2021 as the hyper-contagious Delta variant ripped through some countries.
In two-thirds of developing Asian economies, said ADB, the share of the population that has been fully vaccinated is 30% or lower.
“Growth tended to be stronger in economies that had progressed the most in controlling the pandemic.”
East Asia, where vaccination rates are among the highest in the region, and governments quick to contain outbreaks, is set to grow 7.6% this year compared with an earlier forecast of 7.4%.
Forecasts are lowered for Southeast Asia and the Pacific, where nations have struggled to obtain enough doses to inoculate their populations as they battle fresh waves of infections.
Southeast Asia, including virus-ravaged Indonesia and the Philippines, is expected to grow 3.1% this year compared with a previous forecast of 4.4%.
ADB expects the Pacific to contract 0.6% after forecasting in April a 1.4% growth. – AFP, September 22, 2021
