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Coronavirus-ravaged economies across Asia-Pacific will contract this year for the first time since the early 1960s, and a “swoosh-shaped” recovery next year could be derailed by a protracted pandemic, the Bank predicted Tuesday. Asian Development.
Developing countries in Asia, stretching from the Cook Islands in the Pacific to Kazakhstan in Central Asia, are expected to contract 0.7% in 2020. marking “the first contraction in regional GDP since the early 1960s” and throwing tens of millions of people into poverty, the Manila-based organization said.
In June, he estimated that economies would expand 0.1 percent.
“The recession is widespread, and nearly three-quarters of regional economies are expected to contract, the largest share of its kind in the past six decades,” the bank said in the latest update of its forecast.
While the vast region is expected to rebound next year, and gross domestic product (GDP) is projected to grow 6.8 percent, it will be “substantially lower” than forecast before COVID-19 hit.
“The regional recovery will be L-shaped or ‘swoosh’ rather than V-shaped,” the bank said, noting that a protracted pandemic was the main threat to the outlook.
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The bank warned that re-imposing strong restrictions on the virus could hamper recovery and even trigger “financial turmoil.”
“While Asia’s developing economies remain resilient, continued political support is needed to underpin the recovery,” said ADB chief economist Yasuyuki Sawada.
Pandemic control
Policy support packages announced at the end of August had reached a total of $ 3.6 trillion, about 15 percent of regional GDP, the bank said.
China, where the virus first appeared late last year before becoming a pandemic that has infected more than 29 million people worldwide, is one of the few economies in the region to expand.
After successfully battling the disease, the world’s second-largest economy is forecast to grow 1.8 percent this year and 7.7 percent in 2021, the bank said.
By contrast, India, which is one of the worst affected countries in the world with more than 4.8 million cases despite prolonged shutdowns, is expected to see its economy contract by nine percent in 2020 before expanding in eight percent next year.
“The path and speed of economic recovery in regional economies will depend on many different factors, the most important of which is [the] ability to control and contain the pandemic, “the ADB said.
Summary:
🔷Asian economies will contract for the first time since the early 1960s.
🔷The recession is broad-based: 3/4 of the region’s economies are expected to contract. China the exception.
🔷 Recovery will resume next year.Go here for a full report and more ▶ ️ https://t.co/9QlMNY7upu pic.twitter.com/NdSxCkxg8M
– Asian Development Bank (@ADB_HQ) September 15, 2020
As regional economies contract this year, the number of poor people is likely to increase by at least 78 million, reversing poverty reduction in the past three to four years, according to the report.
However, inflation is expected to remain “subdued” due to depressed demand and lower oil prices, he said.
Another relatively positive aspect was trade. While the region’s exports had contracted, they had fared better than the rest of the world thanks to increased demand for COVID-related health and electronics supplies.
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