Virus restrictions threaten Asia economic recovery in 2021: ADB

Filipinos work at the assembly line of Kinpo Electronics factory in Malvar Batangas in the Philippines

Filipinos work at the assembly line of Kinpo Electronics factory in Malvar Batangas in the Philippines

ADB has provided an initial assistance of United States dollars 600 million in loans and USD 4.4 million in grants for managing socio-economic impacts of the COVID-19 pandemic and supporting quick recovery.

The Asian Development Bank has said that India's economy will contract by 9% in the 2020-'21 financial year, PTI reported.

In its latest update to Asian Development Outlook, ADB said the outbreak in India has intensified since April, spreading fast from cities to rural areas.

It revises down its earlier projection of a paltry 0.1% growth in the region's gross domestic product (GDP) for 2020.

"Developing Asia", which groups 45 countries in Asia-Pacific, is expected to contract 0.7% this year, the ADB said, forecasting the first negative quarterly figure since 1962.

The contraction would be the first since 1961, when growth was down 8 percent. Growth is forecast to accelerate to 7.7% in 2021, up from a previous forecast of 7.4%.

Consistent and coordinated steps to address the pandemic with policy priorities focusing on protecting lives and livelihoods of people who are already most vulnerable and ensuring the safe return to work and restart of business activities will continue to be crucial to ensure the region's eventual recovery is inclusive and sustainable, said Sawada.

Virus containment "seems to be translated into growth performance", and a prolonged pandemic remains the biggest downside risk this year and the next, he said. To mitigate the risk, governments in the region have delivered wide-ranging policy responses, including policy support packages-mainly income support-amounting to $3.6 trillion, equivalent to about 15% of regional GDP.

Europe to see rise in deaths in coming months
Brazil registered the world's second-highest Covid-19 death toll, after the USA , and the world's third-largest case count. The agency said that deaths rose by more than 5500, bringing the global total to 917,417.

While the pandemic remains the biggest downside risk to the region's outlook, Sawada said in a separate media briefing "worsening geopolitical tensions" that include the trade and tech war between USA and Beijing, could also dent growth.

For 2021, the region is forecast to recover and grow 6.8%, still below pre-COVID-19 predictions, the ADB said in an update of its Asian Development Outlook report. It is predicted to develop by 1.8 per cent this 12 months and seven.7 per cent in 2021 with profitable public well being measures offering a platform for development.

China is one of the few economies in the region bucking the downturn.

Tourism-dependent island economies, in particular, have seen wrenching economic contractions.

"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.

The report revised the Philippines' inflation forecasts to 2.4% in 2020 and 2.6% in 2021, compared with the April projections of 2.2% and 2.4%, respectively, as global oil prices stabilize.

Bangladesh will grow 5.2 percent, Bhutan 2.3 percent and Nepal 2.3 percent.

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