Developing Asian economies are to grow a solid 7.3 percent this year after last year contracting slightly due to the COVID-19 pandemic, the Asian Development Bank (ADB) said in a report yesterday.
However, that forecast is in doubt as COVID-19 outbreaks flare in several countries, including Thailand, India and the Philippines, the lender said.
Those setbacks threaten the trend just as growth has been gaining momentum, ADB chief economist Yasuyuki Sawada said.
Photo: Reuters
“Economies in the region are on diverging paths,” he said. “Their trajectories are shaped by the extent of domestic outbreaks, the pace of their vaccine rollouts and how much they are benefiting from the global recovery.”
China, which first reported the virus and has been the first major economy to bounce back from the pandemic, is forecast to grow 8.1 percent this year, slowing to 5.5 percent next year, the ADB said.
It estimates that India’s economy would expand 11 percent this year, in line with similar forecasts from the IMF and private economists.
Surging new cases in India — at more than 300,000 per day for the past five days — might derail that progress as hospitals are inundated with seriously ill patients, it said.
The ADB forecast that Myanmar’s economy would contract nearly 10 percent this year following a military coup that has thrust the country into turmoil.
The economy grew a modest 3.3 percent last year, before the military seized power on Feb. 1, provoking a mass civil disobedience campaign that has stifled most business activity.
ADB economists did not foresee a significant increase in inflation, despite concerns in the US and elsewhere that massive government spending and other stimulus might spark surging prices.
The ADB expects inflation in the region to fall to 2.3 percent this year from 2.8 percent last year, when disruptions from the pandemic pushed food prices sharply higher in some places.
The inflation rate for developing Asia is forecast to rise to 2.7 percent next year.
Apart from the cost of lost lives and misery, as well as damage to health and productivity, the pandemic has extracted a harsh toll in many ways, wiping out millions of jobs and sinking families into poverty.
It has also put children far behind in their studies, the report said.
The authors estimated that the cost to future earnings from school closures amounts to US$1.25 trillion, or more than 5 percent of regional economic activity last year.
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