The Asian Development Bank (ADB) based out of Manila, Philippines on Friday warned that the GDP growth in the Asian countries might be halved because of the Coronavirus shockwave that has brought down difficulties on the business ecosystem across the world. It stated that losses will be enormous this year and there is hope that the Asian economy will bounce back in this true form only in the next financial year.
The Asian economy that includes two of the major economies of India and China was forecasted a percentage growth of 5.2 for the financial year of 2020-21 which will likely to come down to 2.2 percent until it gets back to its normal form
in the next financial year. The coming period is going to be a big test not only for the Asian economies, but also for other major economies as well.
“This will be the lowest growth that developing Asia will have seen in 22 years, or since the Asian financial crisis,” said Abdul Abiad, director of ADB’s macroeconomic research division.
The ADB Outlook report has also forecasted that after regaining strength towards the end of the current financial year, the percentage growth in the economy will shoot up to 6.2 percent in the financial year of 2021-22.
“This is a public health crisis and that’s what needs to be addressed first, before the situation normalises,” Abiad told Reuters. But in containing the pandemic, governments must ensure “the most vulnerable are not left behind,” he added.
Yasuyuki Sawada, ADB’s chief economist said, “the upper end of the range assumed the pandemic will last for six months and spill over to the broader economy. He said the pandemic could turn into a financial crisis if not contained swiftly.”
He said the pandemic could “leave permanent scars” on the global economy and cause a “retreat from globalisation.”