ADB says Asia’s economy to shrink for first time since 60s

Mainland China ADB says Asia’s economy to shrink for first time since 60s
Courtesy: Nandhu Kumar/Unsplash

The Asian Development Bank expects the economies of the Asia region to shrink this year for the first time since the 1960s.

Developing Asia as a whole is likely to record a contraction of 0.7 percent, while Asia excluding newly industrialized nations will be down 0.5 percent, it said in an Asia outlook. Three quarters of the economy in the region will shrink, though Mainland China is still expected to eke out growth of 1.8 percent, as is Vietnam.

The region will see a rebound next year, growing on average 6.8 percent, however there are risks to the outlook, such as more outbreaks of Covid-19. Despite the recovery, it will still leave gross domestic product significantly below 2019 levels, it said.

The outlook for inflation has been revised down to 2.9 percent from 3.2 percent and is expected to ease further to 2.3 percent next year due to lower demand.