MANILA – The Asian Development Bank (ADB) has raised its growth forecast for developing Asia this year on the roll-out of Covid-19 vaccines and the strength of global export demand, but warned that resurgent virus outbreaks threaten the recovery.
China and India are expected to lead the rebound across the vast region stretching from the Cook Islands in the Pacific to Kazakhstan in Central Asia, said the lender today.
The Philippines-based ADB predicted growth of 7.3% compared with its previous forecast last December of 6.8% and a contraction of 0.2% in 2020 – but said the recovery will be “patchy”.
“Some economies continue to struggle to contain the virus and its new variants,” said ADB in its flagship Asian Development Outlook for 2021.
“Tourist-dependent economies in the Pacific and elsewhere face a slow road back. Conversely, a handful of economies in the region that have contained domestic outbreaks and are benefiting from the recovery in global demand will continue to show resilience and expand.”
It warned that delayed vaccine roll-outs could prolong economic disruptions in the region, where “progress varies considerably” in getting jabs into arms.
By end-March, developing Asia had administered 5.2 doses per 100 people, led by China, India, Indonesia and Bangladesh, it said.
This trails the global average of about eight doses per 100, said the bank.
India forecast ‘realistic’
ADB’s upbeat outlook for India – 11% growth after shrinking 8% last year – could be revised as the country battles a huge surge in coronavirus infections, chief economist Yasuyuki Sawada told reporters.
But, he said the forecast is still “achievable and realistic at this stage”, given the low base of comparison, use of more targeted containment measures, and speed of the nation’s vaccination drive.
China – which expanded at its fastest pace on record in the first quarter – is expected to grow 8.1% on the back of global demand for its products and pent-up domestic consumer spending. It grew 2.3% last year.
However, the outlook for some countries is bleak.
Myanmar is likely to contract 9.8% this year, said ADB, as turmoil triggered by the military’s ousting of civilian leader Aung San Suu Kyi in February disrupts an economy already hit hard by Covid-19.
Given the political uncertainty in the Southeast Asian country, the bank said it will not issue a forecast for 2022.
Economic pain triggered by the pandemic will deepen in some Pacific island countries, as international tourism remains blocked by border closures.
The Cook Islands is expected to contract a whopping 26% this year, while Samoa is forecast to shrink by 9.2%.
The Philippines – which shrivelled by 9.6% in 2020, making it the worst performer in Southeast Asia – is expected to grow 4.5% this year.
But, said ADB, the recovery will be “fragile” due to uncertainty over the virus and vaccine supply. – AFP, April 28, 2021
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