ADB trims developing Asia 2021 growth outlook to 7.1%

The growth outlook for the region for 2022 has been raised to 5.4 per cent from 5.3 per cent. New COVID-19 variants, renewed local outbreaks, the reinstatement of various levels of restrictions and lockdowns and slow and uneven vaccine rollouts are weighing down the region’s prospects, it said in a press release.

“Developing Asia remains vulnerable to the COVID-19 pandemic, as new variants spark outbreaks, leading to renewed restrictions on mobility in some economies,” said ADB acting chief economist Joseph Zveglich, Jr.

“Policy measures should not only focus on containment and vaccination, but also on continuing support to firms and households and reorienting sectors in the economy to adapt to a ‘new normal’ once the pandemic subsides to kick start the recovery,” it said.

ADB expects economic growth of 8.8 per cent in South Asia this year, compared with the 9.5 per cent forecast in April for the sub-region. However, the outlook for 2022 has improved to 7 per cent from 6.6 per cent. The projection for India is downgraded to 10 per cent from 11 per cent in 2021, while the outlook for next year has improved to 7.5 per cent from 7 per cent earlier.

The recovery path within the region remains uneven. East Asia’s growth forecast for this year has been raised to 7.6 per cent from 7.4 per cent in April, as a surge in global demand fuels exports from the region. East Asia’s growth prospects for 2022 are unchanged at 5.1 per cent. Growth projections for China remain at 8.1 per cent in 2021 and 5.5 per cent in 2022.

Meanwhile, vaccination progress in developing Asia remains uneven and lags behind that of advanced economies.

The economic growth outlook for Central Asian economies this year is raised to 4.1 per cent from 3.4 per cent projected in April, amid improved prospects for Armenia, Azerbaijan, Georgia, Kazakhstan and Uzbekistan. The sub-region’s 2022 outlook has improved to 4.2 per cent from 4 per cent.

Southeast Asia’s growth projections for 2021 and 2022 have been lowered to 3.1 per cent and 5 per cent respectively from forecasts of 4.4 per cent and 5.1 per cent in April. The Pacific’s economy is set to contract 0.6 per cent this year compared with 1.4 per cent growth projected in April, before expanding 4.8 per cent in 2022.

Inflation in developing Asia is expected to remain in check, at 2.2 per cent this year and 2.7 per cent in 2022. The current trend of higher international commodity and food prices could stoke inflation in some of the region’s economies, ADB said.

Fibre2Fashion News Desk (DS)