Asian Development Outlook (ADO) 2021 Supplement: Renewed Outbreaks and Divergent Recoveries

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It notes that recovery is underway but that regional growth in 2021 is expected to be 7.2%, which is 0.1% lower than was projected in April. Forecast upgrades for Central Asia and East Asia in 2021 partly offset downgrades for South Asia, Southeast Asia, and the Pacific. The regional growth projection for 2022 is upgraded from 5.3% to 5.4%.

Highlights

• Recovery is under way in developing Asia, but with the growth projection for this year revised down slightly from 7.3% in Asian Development Outlook 2021 in April to 7.2% following renewed virus outbreaks in some economies. The projection for 2022 is upgraded from 5.3% to 5.4%.
• East Asia’s 2021 growth forecast is raised from 7.4% to 7.5%, reflecting a strong first quarter. Expansion in the People’s Republic of China is still projected at 8.1% in 2021 and 5.5% in 2022 as favorable domestic and external trends align with April forecasts.
• In South Asia, new waves of infections prompt a lower growth forecast of 8.9% for 2021, followed by growth at 7.0% in 2022. India’s 2021 growth projection is downgraded from 11.0% in April to 10.0%. followed by 7.5% growth in 2022.
• The forecast for Southeast Asian growth in 2021 is downgraded from 4.4% to 4.0% as some countries reimpose pandemic restrictions, followed by 5.2% growth in 2022.
• Central Asia’s growth prospects for 2021 are revised up from 3.4% to 3.6%. The Pacific forecast, by contrast, is slashed from 1.4% to 0.3% as Fiji tightens containment measures.
• Regional inflation is expected to remain benign, the forecast revised up marginally for 2021 from 2.3% to 2.4% but unchanged at 2.7% for 2022.