The Asian Development Bank has lowered its 2021 economic growth forecast for developing Asia amid concerns over the direction of the pandemic.
The ADB forecasts growth of 7.1 per cent this year, according to an update of its Asian Development Outlook report, down from a projection of 7.3 per cent in April. It raised its growth forecast for 2022 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,” the ADB said in a statement.
“Developing Asia remains vulnerable to the Covid-19 pandemic, as new variants spark outbreaks, leading to renewed restrictions on mobility in some economies,” said Joseph Zveglich, ADB acting chief economist. “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 kickstart the recovery.”
Covid-19 cases in developing Asia have risen since the Delta variant emerged in April, the ADB said, with new daily cases peaking at 430,000 in May. More than 163,000 new daily cases were recorded on August 31.
Meanwhile, vaccination progress has been uneven. As of August 31, ADB data reveal that 28.7 per cent of people in developing Asia had full vaccine protection, compared with 51.8 per cent in the US and 58.0 per cent in the EU.
Economic recovery within Asia also remains uneven, the ADB said. East Asia’s growth forecast for this year has been raised to 7.6 per cent from 7.4 per cent in April, while growth prospects for 2022 were unchanged at 5.1 per cent. The ADB’s projections for China remain at 8.1 per cent this year and 5.5 per cent next year.
The ADB expects 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, while the outlook for 2022 has improved to 7.0 per cent from 6.6 per cent.
The ADB projection for India was downgraded to 10.0 per cent from 11.0 per cent in 2021. The outlook for next year has improved to 7.5 per cent from 7.0 per cent.