Yasuyuki Sawada, chief economist at the Asian Development Bank, said the pandemic, which has now infected more than 29 million people worldwide, has slowed domestic consumption, affected external demand and hurt exports.
2020 Update said that Vietnam will benefit from the continued diversion of production from China and the implementation of a free trade agreement with the European Union, which came into effect on August 1.
The ADB stated in a brand-new report that developing economies throughout Asia would typically program unfavorable GDP development of 0.7 percent this year. The Philippines and Indonesia recorded the largest number of infections among Southeast Asian countries.
China, where the coronavirus surfaced in December, is seen bucking the trend as the ADB kept its 2020 growth forecast at 1.8%.
However India, which has the greatest variety of coronavirus cases after the United States and where lockdown steps have actually depressed financial output, is anticipated to shrink by 9 percent this year. This is in contrast to the rapid outbreak in India, which is now the epicenter of the epidemic in Asia with more than 4.8 million cases reported.
Growth is forecast to accelerate to 7.7 per cent in 2021, up from a previous forecast of 7.4 per cent.
ADB's projection for the Korea economy largely came in line with local think tanks' suggestion. "Global trade was down by close to 20 percent year-on-year in April and May. Despite significant pressure on the health and pandemic management systems, the government has managed the economy well with appropriate economic stimulus and social protection measures, ensuring basic services and commodities for the poor and vulnerable", said ADB Country Director in Bangladesh Manmohan Parkash. "Having said that, our baseline assumption is that health risks will be basically contained within this year".
Growth in Developing Asia - a area that excludes superior nations like Japan, Australia and New Zealand - will rebound to six.8 per cent in 2021, partially as a result of it will likely be measured in opposition to a weak 2020, Sawada mentioned. "Financial support to low-income groups and small businesses can also help revive the economy in a more inclusive way", it said. The Asian Development Bank has estimated this.
The updated forecasts show the damage brought by the pandemic was greater than previously thought, with about three-quarters of the region's economies forecast to slump this year. It report noted that "a prolonged pandemic - either an extended first wave in some economies or recurrent waves in others - is the main risk to the outlook, as it would require protracted caution and containment measures, with consequent disruption to both supply and demand".
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