India, China to lead developing Asia rebound: ADB
China was expected to grow 8.1 per cent on the back of global demand for its products and pent-up domestic consumer spending
India and China are expected to lead an economic rebound in vast developing Asia, the Asian Development Bank predicted on Wednesday, raising its growth forecast for the whole 45-nation region.
While India’s growth forecast of 11 per cent for 2021 is “achievable,” China is expected to grow 8.1 per cent this year, 5.5 per cent in 2022, the regional development bank said.
In its Asian Development Outlook report, the Manila-based lender predicted a growth of 7.3 per cent for developing Asia, compared with its previous forecast in December of 6.8 per cent and a contraction of 0.2 per cent in 2020 — but said the recovery would be “patchy.”
The ADB’s bullishness about the vast Asia-Pacific region, stretching from the Cook Islands in the Pacific to Kazakhstan in Central Asia, is based on the rollout of Covid-19 vaccines and the strength of global export demand, but the bank warned that resurgent virus outbreaks threatened the recovery.
South Asia will record the fastest economic recovery this year, with the ADB predicting an expansion of 9.5 per cent after a 6.0 per cent contraction in 2020, buoyed by India’s economic revival.
“Growth is gaining momentum across developing Asia, but renewed Covid-19 outbreaks show the pandemic is still a threat,” Yasuyuki Sawada, ADB chief economist, said in the report.
The ADB’s upbeat outlook for India — 11 per cent growth in 2021 after shrinking 8.0 per cent last year — could be revised as the country battles a huge surge in coronavirus infections, Sawada said.
However, he said, the forecast was still “achievable and realistic at this stage” given the low base of comparison, use of more targeted containment measures and speed of the country’s vaccination drive.
China, which expanded at its fastest pace on record in the first quarter, was expected to grow 8.1 per cent on the back of global demand for its products and pent-up domestic consumer spending. It grew 2.3 per cent in 2020.
The outlook for some countries is bleak. Myanmar is likely to contract 9.8 per cent this year as turmoil triggered by the military’s ousting of civilian leader Aung San Suu Kyi in February disrupted an economy already hit hard by Covid-19.
The Philippines, which shrivelled by 9.6 per cent in 2020, making it the worst performer in Southeast Asia, is expected to grow 4.5 per cent this year.
“Geopolitical tensions, political turmoil, production bottlenecks, financial turmoil and long-term scarring effects of learning losses from school closures due to the pandemic also threaten the recovery,” Sawada said.
Asia accounts for more than 16 per cent of the global caseload of 147.9 million coronavirus infections. With more than 319,000 deaths, the region accounts for 9.8 per cent of the global Covid-19 toll.
“Some economies continue to struggle to contain the virus and its new variants,” the lender said.
“Tourist-dependent economies in the Pacific and elsewhere face a slow road back. Conversely, a handful of economies in the region that have contained domestic outbreaks and are benefiting from the recovery in global demand will continue to show resilience and expand,” said the report.
The Cook Islands is expected to contract a whopping 26 per cent this year, while Samoa is forecast to shrink by 9.2 per cent. — firstname.lastname@example.org
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