SINGAPORE (ICIS)–The Asian Development Bank on
Thursday cut its growth forecast for developing
economies in Asia to 0.1%, down from its 2.2%
projection made in April, hit by weakened
external demand amid the coronavirus pandemic.

The 2020 forecast would be the slowest growth
for the region since 1961, while a 6.2% growth
is still projected for 2021, the multilateral
institution said in a statement.

Excluding the newly industrialised economies of
Hong Kong, South Korea, Singapore and Taiwan,
developing Asia is forecast to grow by 0.4%
this year and 6.6% in 2021.

“Economies in Asia and the Pacific will
continue to feel the blow of the COVID-19
[coronavirus disease] pandemic this year even
as lockdowns are slowly eased and select
economic activities restart in a ‘new normal’
scenario,” said ADB chief economist Yasuyuki
Sawada.

“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.”

Risks to the outlook remain on the downside.

The coronavirus pandemic may see multiple waves
of outbreaks and sovereign debt and financial
crises cannot be ruled out, the ADB warned.

There is also the risk of renewed escalation in
trade tensions between the US and China.

China’s growth is forecast at 1.8% this year
and 7.4% in 2021, compared with April estimates
of 2.3% and 7.3%, respectively.

India’s economy is forecast to contract by 4.0%
in the fiscal year ending 31 March 2021, before
posting a 5.0% growth in the next fiscal year.

Economic activity in southeast Asia is expected
to contract by 2.7% this year before growing by
5.2% in 2021.

Contractions in economic output are projected
in Indonesia (-1.0%), the Philippines (-3.8%),
and Thailand (-6.5%).

Vietnam is among the three out of 11 countries
in southeast Asia that will post growth this
year. At 4.1%, the projected growth for Vietnam
will the fastest pace of expansion for the
region.

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