Asian Development Outlook 2020 Update : Wellness In Worrying Times

As the pandemic persists, developing Asia is projected to contract by 0.7% in 2020—the first regional GDP contraction since the early 1960s. Developing Asia excluding the newly industrialized economies will also contract by 0.5%. Growth is forecast to rebound to 6.8% in 2021, but this will still leave GDP next year substantially below expectations before COVID-19. Thus, the regional recovery will be L-shaped or “swoosh-shaped” rather than V-shaped. South Asia sees economic woes deepen as COVID-19 spreads. The sub region is now expected to shrink by a steep 6.8% in 2020 and rebound by 7.1% in 2021. India began its fiscal year with April–June quarterly GDP contracting by a record 23.9% as a pandemic lockdown clobbered consumer and business spending. The economy having weakened even before the pandemic struck, the government enjoyed little fiscal space with which to respond. Indian GDP is expected to fall by 9.0% in the whole of this fiscal year and then grow by 8.0% in the next. Maldives and Sri Lanka, heavily dependent on tourism, will be among the hardest hit. Output in Maldives is expected to shrink by a fifth in 2020, the sharpest GDP forecast revision in the sub region, then grow by 10.5% in 2021.