Asia’s recovery from the pandemic will diverge with countries that have controlled the virus set for robust economic growth against ongoing weakness for nations that have struggled to contain infections, according to the Asian Development Bank.
Assuming that any new outbreaks of Covid-19 are brought under control and continued progress on vaccine rollouts, the ADB expects 7.3 per cent growth in the developing Asia region, which is made up of 46 countries and territories.
That growth will be bolstered by strong recoveries in China and India, the multilateral lender said.
“Growth is gaining momentum across developing Asia, but renewed COVID-19 outbreaks show the pandemic is still a threat,” said Yasuyuki Sawada, chief economist for the ADB.
The bank forecasts that China’s economy will “surge” by 8.1 per cent in 2021, from 2.3 per cent year-on-year growth in 2020, as domestic consumption picks up. It predicts 5.5 per cent growth for 2022, returning to pre-pandemic trends.
“The recovery will be driven by improvement in the job market, restored consumer confidence, and the release of pent-up household demand,” said Yolanda Fernandez Lommen, ADB country director for China.
Workers make stuffed toys at a factory in Lianyungang, in China’s Jiangsu province © AFP via Getty Images
India’s economy is forecast to rebound by 11 per cent following an 8 per cent contraction in 2020, the ADB said, noting that this was under threat from a “severe” second wave of infections in the country.
The south Asian country’s health system is faltering and supplies of oxygen are running out after it recorded more than 300,000 new cases each day for the past six days.
The ADB highlighted that vaccinations against Covid-19 are “significantly skewed toward advanced economies”, estimating that countries in developing Asia had administered 5.2 doses per 100 people against 45 per 100 in the US.
Small economies that are reliant on tourism will continue to be the most vulnerable to the effects of the pandemic after international travel in the region collapsed in 2020 and have not yet recovered, the bank said.
And it warned that school closures resulting in an average loss of 29 per cent of the academic year will “substantially reduce future productivity and earnings”.
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