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A man eats a takeaway from a chair outside a restaurant in Hong Kong’s Sham Shui Po district, next to Kowloon, in the early morning of July 29, 2020, as new social distancing measures take effect. which include restaurants only serve take out meals, to combat a new wave of coronavirus infections.
Anthony Wallace | AFP | fake images
SINGAPORE – Developing countries in Asia, which include countries such as China, India, Indonesia and Singapore, will contract this year for the first time in about six decades as the coronavirus pandemic continues to hit economies around the world, he said. Asian Development Bank.
In its updated outlook report, ADB said that GDP in Asian developing countries will contract by 0.7% this year. The bank also said that three-quarters of the region’s economies will contract in 2020, lowering its GDP forecasts for those countries.
The pandemic, which has now infected more than 29 million people worldwide, slowed domestic consumption, affected external demand and affected exports, Yasuyuki Sawada, ADB’s chief economist, said in “Street Signs Asia” on Tuesday. from CNBC.
“In addition to this, the travel bans really undermine the free flow of people as well as the trade in goods and services,” he said.
In an attempt to slow the spread of the virus, some countries have closed borders to non-residents, while most have implemented varying degrees of social restrictions, including periods of total lockdown in places like India.
South and Southeast Asia
Southeast Asia was previously expected to grow 1% during the year, but is now forecast to contract 3.8%, with Thailand, the Philippines and Singapore seeing declines of more than 6% each, the ADB said. The Philippines and Indonesia have reported the highest number of infections among Southeast Asian countries.
China, where the coronavirus outbreak was first reported in late December, is the only country expected to post positive growth, albeit well below the levels the world’s second-largest economy has reported in recent years. years. China is forecast to post 1.8% expansion in 2020, down from a previous forecast of 2.3%, as its economy slowly gets back on track, according to the report.
Infection levels in the country appear to be under control. That is in contrast to the rapid outbreak in India, which is now the epicenter of the pandemic in Asia with more than 4.8 million reported cases.
India is forecast to post a 9% decline for calendar year 2020, the ADB said. That was revised down from a previous forecast of 4% growth. India’s fiscal year runs from April 1 to March 31 of the following year. In the three months from April to June, India’s economy contracted at its steepest rate of 23.9% following a national lockdown between April and May.
Growth rebound
Growth is likely to pick up in 2021 and developing Asia is expected to expand by 6.8%. India is expected to grow 8% over the next calendar year, according to the report.
“Our baseline assumption is basically that Covid-19 can be controlled within this year, towards the end of this year. Once the health risks are contained, we can imagine a strong rebound,” Sawada told CNBC. He explained that the governments of developing countries in Asia and the Pacific have already announced support measures totaling more than $ 3 trillion, some of which reach 15% of GDP. Many of those countries still have room for more expansionary or accommodative policy, he said.
“I think this is very, very important for households, especially poor households and vulnerable groups, as well as micro and small businesses, to stay and stay alive, so that after the containment of the crisis of health, may they recover strongly “, Sawada. he said, adding that the “large-scale package helped stabilize financial markets.”
Most of the amount came from governments in East Asia, particularly China, ADB data showed.
But the bank warned in its report that a prolonged wave of Covid-19 infections could stifle the recovery and further disrupt supply and demand, while worsening geopolitical tensions, especially between the United States and China, remain a risk.
Prolonged weakness could trigger crises in some economies, the ADB said.
