Pandemic To Nearly Wipe Out Growth In Large Parts Of Asia-Pacific In 2020: Report

Developing Asia will likely clock up its weakest growth in nearly six decades this year, the Asian Development Bank (ADB) said on Thursday, as measures to contain the contagious novel coronavirus hammer economic activity. Developing Asia, a group of 45 countries in the Asia-Pacific region, is expected to post growth of just 0.1 per cent in 2020, the ADB said in a supplement to its Asian Development Outlook report issued in April, the slowest pace since 1961, before growing 6.2 per cent next year. The updated forecasts show more damage to economies in developing Asia than estimates it released it April, which predicted 2.2 per cent growth for the region in 2020.

"Economies in Asia and the Pacific will continue to feel the blow of the COVID-19 pandemic this year even as lockdowns are slowly eased and select economic activities restart in a ‘new normal' scenario," ADB Chief Economist Yasuyuki Sawada said in a statement.

"While we see a higher growth outlook for the region in 2021, this is mainly due to weak numbers this year, and this will not be a V-shaped recovery," Sawada said, as he underlined the need for governments to undertake measures to cushion the economic blow of the pandemic and prevent further waves of infections.

ADB's outlook for China this year also turned grimmer. It now expects growth in the world's second-largest economy to slow to 1.8 per cent from an earlier forecast of 2.3 per cent, with renewed escalation in US-China trade tensions also posing a downside risk.

Citing depressed demand and lower oil prices, the ADB said inflation for developing Asia will ease to 2.9 per cent for 2020, down from its 3.2 per cent forecast in April, and slow further to 2.4 per cent in 2021.