ADB trims increase forecasts for Asia developing to 7%, cites the risks of Omicron

ADB now sees 2021 GDP growth of 7.0% for developing Asia, down from 7.1%, and 2022 growth of 5.3%, down from 5.4% in September

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ADB trims increase forecasts for Asia developing to 7%, cites the risks of Omicron

On Tuesday, The Asian Development Bank trimmed its growth forecasts for developing Asia for 2021 and next to show risks and uncertainty brought on by the new Omicron strain of coronavirus.

The Manila-based lender now witnesses 2021 gross domestic product (GDP) growth of almost 7.0% for developing Asia, down from 7.1%, and 2022 growth of 5.3%, down from 5.4% in September.

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COVID-19 has receded in developing Asia, but rising infections worldwide and the emergence of a fast-spreading variant suggest that the pandemic will take time to play out,” the ADB stated in a supplement to its report of Asian Development Outlook.

Most of the developing subregions of Asia are forecast to grow slower than before thought in 2021, due in part to very weak recovery in China.

The economy of China that staged a good rebound from the previous year’s pandemic slump, has almost lost momentum in the recent months as it grapples with surging prices, a much slower manufacturing sector, debt issues in the property market, and persistent outbreaks of COVID-19.

The ADB estimates that China’s economy will increase by 8.0% this year, which is slightly weaker than its 8.1% estimate in September, before it comes down to 5.3% in 2022, down from its earlier estimation of 5.5%.

The recent surge of Omicron, which the World Health Organization says has been mentioned by more than almost 60 countries since it was first detected in the last month in southern Africa and Hong Kong, “is a sobering reminder that further outbreaks remain a possibility,” the ADB stated.

The ADB trimmed its 2021 growth forecast for India to 9.7% from the 10.0% project it made in September but had left a 2022 growth forecast which did not change at 7.5%.

To consider Southeast Asia’s slower 3rd quarter expansion, the ADB cut its increased forecast for the subregion to 3.0% for 2021 from 3.1%, but it increased its growth projection for the subregion in the next year to 5.1% from 5.0%.

What is expected is the inflation to stay manageable in Asia, the ADB stated that would allow monetary policy to remain supportive growth amid continued risks from the pandemic.

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ADB trims increase forecasts for Asia developing to 7%, cites the risks of Omicron
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ADB now sees 2021 GDP growth of 7.0% for developing Asia, down from 7.1%, and 2022 growth of 5.3%, down from 5.4% in September
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THE POLICY TIMES
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