(ATF) Asia's economic rebound this year could be stronger than previously thought, the Asian Development Bank said on Wednesday as it forecast China to grow 8.1%, driven by strong domestic demand and exports.
The Manila-based lender warned that risks to its forecasts were skewed more to the downside because new outbreaks and delays in vaccine rollout could prolong disruptions to mobility and stall regional economic activity.
Developing Asia, which groups 45 countries in the Asia-Pacific, is forecast to grow 7.3% in 2021, the ADB said in its outlook, stronger than its previous estimate of 6.8% and follows a 0.2% contraction last year.
For 2022, the region is projected to grow 5.3%, with China moderating to a 5.5% expansion.
"Growth is gaining momentum across developing Asia, but renewed Covid-19 outbreaks show the pandemic is still a threat," Yasuyuki Sawada, ADB chief economist, said.
“Economies in the region are on diverging paths. Their trajectories are shaped by the extent of domestic outbreaks, the pace of their vaccine rollouts, and how much they are benefiting from the global recovery.”
Geopolitical tensions, political turmoil, production bottlenecks, financial turmoil and long-term effects of school closures due to the pandemic also threaten recovery, Sawada said.
Asia has had more than 16% of the global case load of 147.9 million coronavirus infections, according to a Reuters tally. With more than 319,000 deaths, the region accounts for 9.8% of the global toll.
The ADB said the recovery would be uneven. South Asia was expected to record the fastest economic recovery this year, with the ADB predicting an expansion of 9.5% after a 6% contraction in 2020, buoyed by India's economic revival.
Even as the coronavirus crisis in India remained grim, Sawada said ADB's 11% growth forecast, which follows an 8.0% slump in 2020, is "achievable at this stage".
Southeast Asia's 2021 growth forecast was trimmed to 4.4% from a previous estimate of 5.5%, dragged down by a projected 9.8% decline in Myanmar's economic output, which has been hammered by mass protests, strikes and sanctions following a military coup on February 1.
With reporting by Reuters