Manila, Apr 3 (efe-epa).- Economic growth in developing Asia is expected to decline sharply this year due to the impact of the coronavirus pandemic before the regional economies rebound again in 2021, the Asian Development Bank said on Friday.
The Manila-headquartered lender projected 2.2 percent growth of 45 Asian economies, including China and India, in 2020, a downward revision of a previous forecast of 5.5 percent by the bank last year.
However, it said, the “growth is expected to rebound to 6.2 percent in 2021, assuming that the outbreak ends and activity normalizes”.
The 2.2 percent forecast is a sharp decline for the region that recorded a 5.2 percent growth in 2019 and 5.9 percent in 2018.
“Growth could turn out lower, and the recovery slower, than we are currently forecasting. For this reason, strong and coordinated efforts are needed to contain the COVID-19 pandemic and minimize its economic impact, especially on the most vulnerable,” ADB chief economist Yasuyuki Sawada said in a statement.
Excluding the newly industrialized economies of Hong Kong, China, South Korea, Singapore, and Taiwan, developing Asia’s growth is projected to grow 2.4 percent this year, compared to 5.7 percent in 2019.
However, it will rebound to 6.7 percent next year, the bank said.
The lender said China will grow 2.3 percent this year after a sharp contraction in the industry, services, retail sales, and investment in the first quarter due to the outbreak.
The Chinese growth will jump “to an above-normal 7.3 percent in 2021 before reverting to normal growth”, it said.
Similarly, in India, measures to contain the spread of the virus and a weaker global environment this year will offset the benefits from recent tax cuts and financial sector reforms.
The Indian growth is forecast to slow to 4 percent this financial year (that began on April 1) before bouncing back to 6.2 percent in 2021-22.
The report said that sub-regions of east and Southeast Asia that are more economically open or tourism-dependent like the Pacific will be hard hit.
“Economic activity in the Pacific sub-region is expected to contract by 0.3 percent in 2020 before recovering to 2.7 percent in 2021,” it said.
The bank indicated that the global cost of the pandemic could range from $2 trillion to $4.1 trillion, equivalent to a loss of between 2.3 percent to 4.8 percent of the global gross domestic product.
The lender, in the last month when the outbreak was yet to be designated a pandemic, had calculated that these losses will not cross a 0.4 percent mark of the global GDP. EFE-EPA