The Asian Development Bank (ADB) has lowered its 2021 economic growth outlook for developing countries in Asia, a region weakened by the rapid spread of the new COVID-19 variant.
ADB has announced that the region’s economy will grow 7.1% this year, up from 7.3% in April. Asia Development Outlook Update Released on Wednesday.
Banks predicted that growth in the region would slow to 5.4% in 2022.
“Developing Asia remains vulnerable to the COVID-19 pandemic,” said Joseph Zvegrich, Chief Economist at ADB. Related statement.. “New variants cause outbreaks and lead to new restrictions on mobility in some economies.”
The resurrection of COVID-19, according to ADB reports, is the main risk faced “probably due to new viral variants, reduced vaccine efficacy, or delayed vaccination progression.”
ADB said the recovery in the area was uneven. East Asia boosted exports due to a surge in global demand, but Southeast Asia struggled to control the outbreak of the virus.
The number of COVID-19 cases caused by the CCP (Chinese Communist Party) virus, commonly known as the novel coronavirus, has increased in Asia since the appearance of the delta mutant in April.
“Policy measures should focus not only on containment and vaccination, but also on continued support for businesses and households, and sector turnaround,” Zveglich said.
China, the region’s largest economy, has a growth forecast of 8.1% in 2021 and 5.5% next year.
The debt crisis faced by Chinese real estate developer Evergrande was pointed out by banks. Abdul Abiad, director of macroeconomic research at ADB, said it has upset the global market and needs “careful surveillance.”
“Housing is an important element of the Chinese economy,” said Abiad.
He added that if the real estate sector is affected, it could have a spillover effect on the Chinese economy.
This year’s outlook for Hong Kong, South Korea and Taiwan has been upgraded by ADB.
On the other hand, the forecast for Southeast Asia was lowered from 4.4% to 3.1% due to the low forecasts for Indonesia, Malaysia, Thailand and Vietnam. The same was true for subregions of the Pacific Ocean.
ADB said it expects South Asia’s economic growth this year to be 8.8%, compared to April’s 9.5% forecast for subregions (as part of that). India’s growth rate fell from 11% to 10% this year). However, the overall outlook for South Asia in 2022 improved from 6.6% to 7%.
According to the bank, the economic growth outlook for the Central Asian economy this year has been raised from the April forecast of 3.4% to 4.1%.
Inflation is projected to be 2.2% in 2021 and 2.7% in 2022. The current upward trend in international commodity and food prices could cause inflation in some economies in the region, ADB warned.