The Asian Development Bank (ADB) lowered its 2021 economic growth outlook for Southeast Asia, on the backdrop of continuing concerns over the coronavirus pandemic. The bank cut its economic outlook for the region to 3.1% in 2021, much slower than initially expected at 4% in July, as well as the original projection of 4.4% in April. However, the 2022 economic growth outlook was kept unchanged at 5%.
Indonesia’s 2021 and 2022 economic outlook has been updated to 3.5% and 4.8%, respectively. Thailand’s economic growth is expected to fall to 0.8% this year and expand by 3.9% next year. Vietnam’s economy is expected to grow 3.8% in 2021 and by 6.5% in 2022.
Malaysia’s economy is now expected to grow by 4.7% in 2021 and by 6.1% by the next year. Myanmar’s economy is expected to contract by 18.4% in 2021, twice as much as the previous forecast. In the meanwhile, the Philippines’ economic growth projection for 2021 was kept unchanged at 4.5% this year and 5.5% in 2022.
New virus variants weigh on Developing Asia’s outlook
Similarly, the bank has also revised economic forecasts for Developing Asia, South Asia as well as East Asia. ADB forecasted economic growth in Developing Asia at 7.1% this year, which is lower than the earlier projection of 7.3% in April. For 2022 it was raised to 5.4% from 5.3%.
According to the report released today by the bank, new virus variants, the resurgence of the latest outbreaks, the reinstatement of restrictions and lockdowns, as well as slow vaccine rollouts weighted down the region’s prospects. On another note, ADB expects inflation in developing Asia to remain in check, at 2.2% in 2021 and 2.7% in 2022.
For the South Asia region, ADB expects economic growth of 8.8% for this year, as compared to the 9.5% forecast of April. India’s economy, South Asia’s largest, is expected to expand by 10% this year and 7.5% in 2022.
On the back of rising exports from the region, ADB raised East Asia’s growth forecast to 7.6% from 7.4% in April, while prospects for 2022 were kept unchanged at 5.1%. The forecast for Asia’s largest economy, China was kept unchanged at 8.1% this year and 5.5% for next year.
Meanwhile, the Pacific economy is expected to contract 0.6% in 2021, in comparison to the 1.4% growth projected earlier in April. The sub region’s growth is likely to expand by 4.8% in the next year, according to the bank. Growth in Central Asia was projected at 4.1% this year and 4.2% in the next.