Developing Asia's economic rebound this year could be stronger than previously thought, the Asian Development Bank said on Wednesday, underpinned by expectations of a solid global recovery and progress on vaccines.
But the Manila-based lender was quick to caution 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 percent in 2021, the ADB said in its Asian Development Outlook report, stronger than its previous estimate of 6.8 percent and follows a 0.2 percent contraction last year.
For 2022, the region is projected to grow 5.3 percent.
By region, South Asia will record the fastest economic recovery this year, with the Asian Development Bank predicting an expansion of 9.5% after a 6.0% contraction in 2020.
"Growth is gaining momentum across developing Asia, but renewed COVID-19 outbreaks show the pandemic is still a threat," said Yasuyuki Sawada, ADB chief economist, said in the report.
Geopolitical tensions, political turmoil, production bottlenecks, financial turmoil and long-term scarring effects of learning losses from school closures due to the pandemic also threaten recovery, Sawada said in a separate briefing.
Asia accounts for more than 16 percent 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 percent of the global COVID-19 toll.
As some economies continue to struggle to contain the virus and its new variants, the ADB said the recovery would be uneven.
China's economic rebound from a pandemic-induced slump is forecast to be the strongest this year, with growth seen at 8.1%, driven by strong domestic demand and exports, before moderating to 5.5 percent in 2022, the ADB said.
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