Silk Road Headlines_9th April, 2020
The Asian Development Bank has released an updated report, forecasting the impact of Covid-19 on Asian (regional) economies in 2020-21 [After The Coronavirus: The Asian Belt & Road Initiative Economic Recovery 2020-2021]. The gist of the report is as follows: Asian economies will see a sharp drop in economic growth in the year 2020 but they will see an ‘immediate rebound’ in 2021. However, the Bank is much less optimistic about the chances of an immediate rebound in the West, due to growth stagnation or contraction in US and Europe. This view is in line with some other analysts such as Fitch. Globally, according to the worst scenario developed by the bank, the impact of this pandemic is estimated to be a loss between US$2 trillion and US$4.1 trillion, that is to say, between 2.3 percent and 4.8 percent of global GDP. However, it can get even worse depending on how countries and economies react to the pandemic.
China, needless to say, is severely hit. China’s 2020 GDP is estimated to be around 2.3 (down from 6.1 in 2019 and 6.7 in 2018). It is however predicted to have a quick rebound in 2021 with an estimated GDP of 7.1. ASEAN economies are forecast to mirror the Chinese trend and decelerate to a regional growth of 2.2, with a quick rebound (above 6%) in 2021. After years of steady growth, Central Asia is predicted to see a growth of 2.8 (down from 4.9 in 2019). Lower energy prices, lower mineral exports and remittances from Russia, less tourism and trade, are all making it more challenging for the economies of Central Asia and Caucasus. The economic state of affairs is going to be less gloomy for South Asian actors and their economies: ‘Regional growth will decelerate to 4.1% in 2020 and then recover to 6.0% in 2021, largely tracking the trend in the dominant Indian economy.’