KUALA LUMPUR, Sept 22 — The recovery in developing Asia will continue at a slightly slower pace with the speed of recovery depending on economies’ containment of the Covid-19 pandemic, Asian Development Bank said.
Macroeconomics research director Abdul Abiad said the regional growth paths are diverging as economies that have successfully contained the pandemic and actively rolled out vaccines are benefitting more than others from the recovery in global demand.
“The region’s output is forecast to expand by 7.1 per cent in 2021 and 5.4 per cent in 2022.
“Inflation is projected at 2.2 per cent in 2021 and 2.7 per cent in 2022,” he said in his presentation during a webinar held in conjunction with the launch of the Asian Development Outlook (ADO) 2021 report today.
He said in the case of Malaysia, more than 40 per cent of the population are vaccinated but yet it is still struggling.
Abdul believes that when the government ramped up its vaccination programmes in late July, it was too late to stop the Delta variant wave that started earlier that month.
“Despite making good progress, it is still unable to tackle the pandemic which has led to the domestic outbreak that resulted in factories being restricted to 60 per cent,” he said.
Echoing him, senior regional cooperation officer Dulce Zara said the manufacturing sector in Malaysia and globally is suffering.
“We see supply chain disruptions happening everywhere and the main reason is we have been controlled by the (Delta) variant.
“However, we can now see that slowly economies are opening up,” she said.
Zara added that besides Malaysia, Brunei and Vietnam are also having high cases of Covid-19 infections.
“But what is important is that the trend is going down and this is because the governments are ramping up efforts to roll out their vaccination programmes,” she said.
According to the ADO 2021 report, Covid-19 cases in developing Asia have increased since the Delta variant emerged in April this year, with new daily cases peaking at 430,000 in May.
The report also said that vaccination progress in developing Asia remains uneven and lags behind that of advanced economies.
Meanwhile, Abdul said additional downside risks for the region are possible geopolitical tensions, global supply chain disruptions, and financial-market turbulence as the United States monetary policy normalises.
“As economies recover from the pandemic, medium-term risks will return to centre stage.
“Chiefly among these are natural disasters and extreme weather events linked to climate change as well as the fall-out from rising food insecurity,” he said. — Bernama