Asia recession: The Asian Development Bank (ADB) says the Covid-19 pandemic has pulled the region’s developing economies into recession.
It is the first time in six decades that “developing Asia” – a designation that includes 45 countries – has seen a regional slump.
The ADB says developing Asia’s economy will shrink by 0.7% in 2020.
But the region is expected to rebound strongly in 2021, growing by 6.8% next year.
The bank’s Asian Development Outlook Update shows about three-quarters of the region’s economies are forecast to slump this year.
It revises down its earlier projection of a paltry 0.1% growth in the region’s gross domestic product (GDP) for 2020.
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“Most economies in the Asia and Pacific region can expect difficult growth path for the rest of 2020,” ADB chief economist Yasuyuki Sawada said in a statement.
The ADB’s assessment brings the lender into line with the International Monetary Fund, which made a similar prediction earlier this year.
The worst affected is South Asia, yet China is bucking the trend.
India’s economy contracts 9% this year, and China’s growth at 1.8 percent.
Southeast Asia is likely to see a drop of 3.8%.
Tourism-dependent island economies, in particular, have seen wrenching economic contractions.
Fiji’s economy will shrink by 19.5%, while the Maldives is likely to see a 20.5% contraction.
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facts about this recession
The good news is that the region is will recover next year, with growth of 6.8%.
China’s economy will rebound by 7.7% in 2021, while India will also bounce back with 8% growth next year, the ADB says.
But the bank warns that a recovery will derail a prolonged pandemic and tougher containment measures.
“The economic threat posed by the Covid-19 pandemic remains potent, as extended first waves or recurring outbreaks could prompt further containment measures,” Mr Sawada said.