Developing Asia was projected to contract less than the previous forecast as most economies relaxed containment measures despite the persistent spread of Covid-19, the Asian Development Bank said in its latest report, released Thursday.
Developing Asia was expected to shrink 0.4 percent in 2020, less than the 0.7 percent contraction envisaged in the Asian Development Outlook 2020 Update in September.
Growth will rebound to 6.8 percent in 2021, as previously estimated, the lender said.
The ADB cautioned that a prolonged pandemic is still the main risk to the outlook, as it can derail recovery and undermine stability in some economies.
Projected growth in East Asia in 2020 was upgraded from 1.3 percent to 1.6 percent as the People's Republic of China and Taipei, China recover more quickly than expected.
The lender upgraded China's 2020 growth outlook to 2.1 percent from 1.8 percent. The projection for next year was retained at 7.7 percent.
The earlier South Asia forecast for 6.8 percent contraction was upgraded to 6.1 percent in line with an improved projection for India. The outlook for next year was lifted to 7.2 percent from 7.1 percent.
The agency revised GDP forecast for India to -8 percent from -9 percent. The growth forecast for next year was maintained at 8 percent.
Recovery in Southeast Asia continues to lag as virus containment efforts in the larger economies hamper economic activity, the agency noted. Sub-regional forecasts were downgraded for 2020 from 3.8 percent contraction to 4.4 percent, and for 2021 from 5.5 percent growth to 5.2 percent.
Growth forecasts for Central Asia and the Pacific were unchanged from September.
Central Asia was still projected to contract by 2.1 percent this year, and the Pacific economies by 6.1 percent as global tourism continues to languish.
Further, the ADB said depressed demand and low oil prices will keep regional inflation in check at 2.8 percent in 2020 and 1.9 percent in 2021.
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