Latest coronavirus: Asian recovery depends on pandemic containment, development bank says

Asia’s recovery from the pandemic will diverge among countries that have controlled the virus set for strong economic growth against the continuing weakness of nations that have struggled to contain infections, according to the Asian Development Bank.

Assuming that new outbreaks of Covid-19 are controlled and further progress is made in vaccine deployment, the AfDB expects 7.3% growth in the developing Asian region, made up of 46 countries and territories.

This growth will be bolstered by strong recoveries in China and India, the multilateral lender said.

“Growth is gaining momentum in developing Asia, but renewed outbreaks of COVID-19 show that the pandemic remains a threat,” said Yasuyuki Sawada, chief economist at the ADB.

The bank predicts that the Chinese economy will “increase” by 8.1 percent in 2021, from 2.3 percent year-on-year growth in 2020, as domestic consumption recovers. It predicts growth of 5.5% for 2022, returning to pre-pandemic trends.

“The recovery will be driven by the improvement in the labor market, the recovery of consumer confidence and the release of the accumulated demand from households,” said Yolanda Fernandez Lommen, China’s country director for the ADB.

India’s economy is expected to rebound by 11% after an 8% contraction in 2020, the AfDB said, noting that it was under threat of a second “severe” wave of infections in the country.

The health system in the South Asian country is faltering and oxygen supplies are running out after more than 300,000 new cases have been registered every day over the past six days.

The AfDB noted that vaccinations against Covid-19 are “significantly skewed toward advanced economies,” estimating that Asian development countries had administered 5.2 doses per 100 people versus 45 per 100 in the United States.

Small economies that depend on tourism will continue to be the most vulnerable to the effects of the pandemic after international travel to the region collapsed in 2020 and has yet to recover, the bank said.

And he warned that school closures resulting in an average loss of 29% of the academic year “will substantially reduce future productivity and revenue.”