Asia will only have a slight growth of 0.1 per cent 2020 with coronavirus pandemic hampering conomic activity and weakening external demand, according to the Asian Development Bank (ADB).
In its latest Outlook, the ADB has forecast the slight growth as the slowest growth for the region since 1961. However, it said that the region will see a rise in the growth to 6.2 per cent in 2021. Ii also noted that Gross Domestic Product (GDP) levels will remain below what had been envisioned and below pre-crisis trends in 2021. Excluding the newly industrialized economics 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 per cent in 2021.
ADB Chief Economist Yasuyuki Sawada said that economies in Asia and the Pacific will continue to feel the blow of the pandemic this year even as lockdowns are slowly eased and select economic activities restarted. Sawada has asked the governments to undertake policy measures to reduce the negative impact of the deadly virus. Sawada said that the governments should ensure that no further waves of outbreaks occur. The ADB also pointed out the risk of renewed escalation in trade tensions between the United States and China
In the ADB outlook, they forecast a growth of 1.3 per cent in East Asia in 2020. Meanwhile, growth ir South Asia is forecast to contract by three per cent on in 2020, compared to 4.1% growth predicted in April. It said that India’s economy is forecast will see a growth of 5.0% in 2021. In South East Asia, the growth is expected to contract by 2.7 per ent this year before growing by 5.2 per cent 2021. It predicted that Central Asia’s economic activity will contract by 0.5 per cent and would see a growth of 4.2 per cen in 2021. Apart from this, the ADB also pointed out that the pacific region was hit hard because of restricted trade flows and declining tourism.
The ADB Outlook forecast that the economy will contract by 4.3 per cent in 2020 before rising to 1.6 per cent growth in 2021. Moreover, th ADB also predicted inflation for the region at 2.9 per cent in 2020. It said that inflation may ease in 2021 at 2.4 per cent.
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