Asia’s recovery from the pandemic will diverge with countries that have controlled the virus as they prepare for robust economic growth against the lingering weakness of countries that have struggled to contain infections, according to the Asian Development Bank.
Assuming any further outbreaks of Covid-19 are brought under control and progress in vaccine deployment continues, the AfDB expects growth of 7.3% in the developing Asia region, which includes 46 countries and territories.
This growth will be supported by strong recoveries in China and India, the multilateral lender said.
“Growth is gaining momentum across developing Asia, but new outbreaks of COVID-19 show that the pandemic is still a threat,” said Yasuyuki Sawada, chief economist of the AfDB.
The bank predicts that the Chinese economy will “jump” by 8.1% in 2021, against 2.3% year-on-year growth in 2020, as domestic consumption picks up. It predicts 5.5% growth for 2022, returning to pre-pandemic trends.
“The recovery will be driven by improving labor market, restoring consumer confidence and releasing pent-up household demand,” said Yolanda Fernandez Lommen, AfDB Director for China.
India’s economy is expected to rebound by 11% after contracting 8% in 2020, the AfDB said, noting that this was threatened by a second wave of “severe” infections in the country.
The South Asian country’s health system is failing and oxygen supplies are running out after recording more than 300,000 new cases every day in the past six days.
The AfDB stressed that vaccinations against Covid-19 are “significantly skewed towards advanced economies”, estimating that developing countries in Asia had administered 5.2 doses per 100 people compared to 45 percent in the United States.
Small economies that depend on tourism will continue to be the most vulnerable to the effects of the pandemic following the collapse of international travel to the region in 2020 and have yet to recover, the bank said.
And he warned that school closures resulting in an average loss of 29 percent of the school year “would dramatically reduce future productivity and income.”