On the early morning of July 29, 2020, a person eats a fasting meal on a chair placed outside a rest outside Runt in Hong Kong’s Kowloon-side Sham Shui Po district, as new social distance measures have been implemented, allowing only rest restaurants rent. To combat a new wave of coronavirus infections, serve takeaway meals.
Anthony Wallace | AFP | Getty Images
SINGAPORE – Developing countries in Asia, including China, India, Indonesia and Singapore, will sign the agreement for the first time in nearly six decades this year as the coronavirus epidemic is hammering economies around the world, the Asian Development Bank said.
In its updated Outlook report, ADB said GDP in developing Asia will contract 0.7% this year. The bank also said that the region’s economy is set to shrink by three-quarters in 2020, lowering its GDP forecast for those countries.
The epidemic, which now infects more than 29 million people worldwide, has slowed domestic consumption, affected external demand and hit exports, ADB chief economist Yasuyuki Sawada told CNBC’s “Street Signs Asia” on Tuesday.
“On top of this, travel restrictions really affect the free flow of people as well as the trade in goods and services.”
In an effort to slow the spread of the virus, some countries have closed non-resident borders while most have implemented various social restrictions, including total lockouts, in places like India.
South and Southeast Asia
Southeast Asia was expected to grow 1% for the previous year, but is now projected to reach a set.8 per cent agreement with Thailand, the Philippines and Singapore, the ADB said. The Philippines and Indonesia are the most infected countries in Southeast Asia.
China is the only country to report positive coronavirus outbreaks reported in late December, although the level of the world’s second-largest economy has risen in recent years. China will expand 1.8% in 2020, below its previous forecast of 2.3%, the report said.
The level of infection in the country seems to be under control. This is in stark 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.
India is projected to post a 9% decline for calendar year 2020, the ADB said. Which was revised from the previous 4% growth forecast. India’s fiscal year runs from 1 April to 31 March next year. In the three months between April and June, India’s economy shrank at its fastest pace to 23.9% after a national lockdown between April and May.
Growth rebound
Growth is likely to stabilize in 2021, with growth expected to reach 6.8% in developing Asia. According to the report, India will grow by 8% for the next calendar year.
“Our baseline assumption is that Kovid-19 can be controlled by the end of this year, by the end of this year. Once the health risks are over, we can imagine a strong bounce back,” Sawada told CNBC. He explained that the governments of developing Asia and the Pacific have already announced more than થી 3 trillion in support measures, some as high as 15% of GDP. He said there is still scope for more broad or favorable policy in those countries.
“I think this is very important to keep homes, especially poor households and vulnerable groups as well as micro and small businesses to survive and survive so that, once the health crisis is resolved, they can recover strongly,” Sawada said. “The massive package has helped stabilize financial markets.”
ADB figures show that the bulk of this amount came from the governments of East Asia, especially China.
But the bank warned in its report that the long wave of Covid-19 infection hinders recovery and could disrupt demand and supply when the U.S. in particular is disrupted. And geopolitical tensions between China remain at greater risk.
Prolonged weakness could lead to a crisis in some economies, the ADB said.
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