Asian economies will stagnate in 2020 due to the impact of COVID-19, with growth of 2.2%, but will rebound 6.2% in 2021 if the pandemic is controlled and activity normalizes, according to the annual report from the Asian Development Bank (ADB).
The Manila-based lender revised down its growth forecast for the region, which had stood at 5.5% in September last year, before the coronavirus outbreak.
The forecast of 2.2% represents a strong bump for the region, after the Asian economies expanded by 5.2% in 2019 and 5.9% in 2018, as illustrated by the ADB report published today.
The global cost of the pandemic will oscillate between 2 trillion dollars and 4.1 trillion, which is equivalent to losing between 2.3% and 4.8% of the World Gross Domestic Product (GDP), according to the ADB, that a month ago - before the outbreak reached the magnitude of a pandemic - calculated that these losses would not represent more than 0.4% of global GDP.
The region's developing economies - which exclude South Korea, Singapore, Hong Kong and Taiwan - will grow this year by 2.4% compared to 5.7% in 2019; and 6.7% will be recovered in 2021.
"The evolution of the pandemic, and therefore the outlook for the global and regional economy, is highly uncertain. Growth may be lower and the recovery slower than we are forecasting," said ADB chief economist Yasuyuki. Sawada.
China suffered a sharp contraction in industry, services, retail sales and investment during the first quarter, when the COVID-19 outbreak erupted in Wuhan, so its growth forecast for this year stalls at 2.3%.
The Chinese economy will climb to 7.3% in 2021, above the average, before stabilizing in the following years.
In India, restrictions to contain the spread of the virus will weigh down the benefits of tax cuts and financial sector reforms, so its growth forecast remains at 4%, reaching 6.2% in 2021.
In developing Asia, the areas most affected by the fall in global demand will be the most economically open, such as Southeast Asia - which will only grow 1% this year due to its link with China - or dependent on tourism, such as the Pacific, which will contract 0.3% in 2020 to return to positive data in 2021 of 2.7%.
South Asia will slow to 4.1% in 2020 and recover 6% in 2021; while Central Asia - affected by the fall in oil and raw material prices - will grow by only 2.8% this year.