New Delhi (NVI): Coronavirus-ravaged economies across the Asian Pacific will contract this year for the first time since the early 1960s, according to the the Asian Development Bank (ADB) forecast.
It will be the first time in six decades that “developing Asia” – a designation that includes 45 countries – will see a regional slump.
Developing Asia – stretching from the Cook Islands in the Pacific to Kazakhstan in Central Asia – is expected to contract by 0.7 per cent in 2020, throwing tens of millions of people into poverty due to the coronavirus pandemic.
The contraction would be the first since 1961, when growth was down 8 per cent. However, developed countries such as Japan and Australia are excluded.
The bank’s Asian Development Outlook Update shows about three-quarters of the region’s economies are forecast to slump this year.
But the region is expected to rebound strongly in 2021, growing by 6.8 per cent next year.
It revises down its earlier projection of a paltry 0.1 per cent growth in the region’s gross domestic product (GDP) for 2020.
South Asia is likely to be the worst affected, while China is bucking the trend.
India’s economy is expected to contract 9 per cent this year, while China’s growth is forecast at 1.8 per cent. Southeast Asia is likely to see a drop of 3.8 per cent.
Furthermore, tourism-dependent island economies, in particular, have seen wrenching economic contractions.
Fiji’s economy is expected to shrink by 19.5 per cent, while the Maldives is likely to see a 20.5 per cent contraction.
China’s economy is expected to rebound by 7.7 per cent in 2021, while India will also bounce back with 8 per cent growth next year, the ADB says.
But the bank warns that a recovery could be derailed by a prolonged pandemic and tougher containment measures.