In its Asian Development Outlook Supplement Report of December 2021, the Asian Development Bank (ADB) has trimmed the growth forecasts for developing Asia for 2021-2022 to reflect the economic impact and uncertainty caused by the new Omicron COVID -19 variant.
- ADB marks the 2021 Gross Domestic Product (GDP) growth projection of developing Asia to 7 percent, down from its earlier projection of 7.1 percent (September 2021), and 2022 growth to 5.3 percent, down from 5.4 percent.
ADB’s Growth Forecast:
i.India: The ADB trimmed its 2021 growth forecast for India to 9.7 percent from the 10 percent but left the 2022 growth forecast unchanged at 7.5 percent.
ii.South Asia: ADB cuts South Asia’s growth forecast to 8.6% for 2021, while the forecast for 2022 is maintained at 7.0%
iii.South East Asia: The growth forecast for its subregion was reduced to 3.0 percent for 2021 from 3.1 percent, but it raised its 2021 growth projection for the subregion to 5.1 percent from 5.0 percent
iii.Central Asia: Central Asia’s growth prospects are substantially upgraded from 4.1 percent to 4.7percent for 2021 and then from 4.2 percent to 4.4 percent for 2022.
iv.Pacific: The Pacific is still forecast to contract by 0.6 percent in 2021, then grow by 4.7 percent in 2022.
v.China: The ADB projects China’s economy to grow 8.0 percent in 2021, slightly weaker than its 8.1 percent in September 2021, and to 5.3 percent in 2022 which is down from its earlier projection of 5.5 percent.
Inflation: The inflation forecast of developing Asia was revised to 2.1 percent for 2021 and unchanged at 2.7 percent for 2022.
i.COVID-19 has been reduced in developing Asia, but the infection has taken its new variant Omicron, which takes time for the economy to recover.
ii.Most of developing Asia’s subregions grow slower than predictions by ADB in 2021, due in part to weak recovery in China.
Vaccination Trend: Vaccination rates have increased across developing Asia recently where nearly half of the population is fully protected against Covid-19 at the end of November 2021, compared to August 2021.
i.The Omicron was first detected in October 2021 in southern Africa and Hong Kong, China and now more than 60 countries have been affected.
ii.Omicron is more transmissible than earlier variants and the economic impact could be higher.
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About Asian Development Bank (ADB):
President – Masatsugu Asakawa
Established – 19th December 1966
Headquarters – Manila, Philippines
Member Countries – 68 members (49 from Asia and Pacific regions)