Developing Asia will barely grow in 2020 as containment actions to address the coronavirus disease pandemic hamper economic activity and decrease external demand, according to a new set of forecasts from the Asian Development Bank (ADB).
In a regular supplement to its annual flagship economic publication, the Asian Development Outlook (ADO) 2020 released in April, ADB forecasts growth of 0.1% for the region in 2020 (Table 1). This is down from the 2.2% forecast in April and would be the slowest growth for the region since 1961. Growth in 2021 is anticipated to grow to 6.2%, as forecast in April. GDP levels in 2021 will remain under what had been envisioned and below pre-crisis trends.
Excluding the lately 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.
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,” stated Yasuyuki Sawada, ADB Chief Economist. “While we see a higher growth outlook for the region in 2021, this is mainly due to weak numbers this year, and this will not be a V-shaped recovery. Governments should undertake policy measures to reduce the negative impact of COVID-19 and ensure that no further waves of outbreaks occur.”
Hazards to the outlook remain on the downside. The COVID-19 pandemic may see multiple waves of outbreaks in the coming period and sovereign debt and financial crises cannot be ruled out. There is also the risk of renewed escalation in trade tensions between the US and China (PRC).
East Asia is forecast to grow by 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.