20200411-亚行-ASIAN_DEVELOPMENT_OUTLOOK_2020_392页_4mb

Summary of Asian Development Outlook 2020

Core Content

The Asian Development Outlook 2020 provides an analysis of the economic impact of the COVID-19 pandemic on developing Asia and highlights the key drivers of innovation that are essential for sustainable and inclusive growth in the region. It outlines the challenges faced by the region in 2020 and the expected recovery in 2021, while emphasizing the need for long-term policy reforms and institutional improvements to foster innovation.

Main Views

• Economic Impact of the Pandemic:
  The outbreak of the coronavirus in early 2020 severely disrupted economic activity in developing Asia, leading to a sharp slowdown in growth.

  • Growth in developing Asia is projected to decline from 5.2% in 2019 to 2.2% in 2020, then rebound to 6.2% in 2021.
  • High-income newly industrialized economies (Hong Kong, China; Republic of Korea; Singapore; and Taipei, China) are expected to grow at 2.4% in 2020 and 6.7% in 2021.
  • The pandemic poses significant downside risks, including potential financial turmoil, prolonged declines in commodity prices, and weakened global demand.
  • The estimated global economic loss from the pandemic ranges between $2.0 trillion and $4.1 trillion, equivalent to 2.3% to 4.8% of global GDP.
  • Developing Asia is expected to experience losses of 1.0% to 2.2% of GDP, with the People's Republic of China facing losses of nearly 5% of GDP.

• Inflation Trends:

  • Inflation is expected to rise in 2020 due to increased food prices, particularly pork in China and vegetables in India.
  • It is projected to ease in 2021, returning to 2.3%.
  • Inflation in South Asia is expected to soften to 4.1% in 2020, but Pakistan will face double-digit inflation due to rising food prices, utility rate hikes, and currency depreciation.

• Regional Outlook:

  • East Asia: Growth will slow to 2.0% in 2020 but rebound to 6.5% in 2021.
  • South Asia: Growth is expected to decline to 4.1% in 2020 and recover to 6.0% in 2021, largely following India's performance.
  • Southeast Asia: Growth will decelerate to 1.0% in 2020, especially due to the slowdown in the PRC and disrupted trade and investment.
  • Central Asia: Growth is expected to slow to 2.8% in 2020 due to lower oil prices.
  • The Pacific: Growth is forecast to contract by 0.3% in 2020 due to declining tourism but will rebound in 2021.

• Importance of Innovation:

  • Innovation is crucial for overcoming the economic challenges posed by the pandemic and for achieving more inclusive and environmentally sustainable growth.
  • Five key drivers of innovation are identified:
    1. Sound education systems
    2. Productive entrepreneurship
    3. High-quality institutions
    4. Efficient financial systems
    5. Dynamic cities that promote knowledge exchange
  • The report emphasizes that building an innovative society requires long-term commitment and effort, as there are no shortcuts.
  • It notes that one in three 10-year-olds in Asia cannot read adequately, highlighting the need for educational reform in lagging economies.

Key Information

• The report was published by the Asian Development Bank (ADB) in April 2020.
• It outlines forecasts and policy recommendations for the region.
• The ADB has been actively supporting its members through policy dialogue, loans, grants, and technical assistance.
• The report includes a special topic on the impact of the coronavirus outbreak, which serves as an updated assessment of the regional and global economic effects.
• The baseline forecast assumes that the pandemic will be contained in 2020 and that economic activity will normalize in 2021.
• However, the report acknowledges that the duration and severity of the pandemic remain uncertain, and outcomes could be worse than projected.

Conclusion

The Asian Development Outlook 2020 underscores the critical role of innovation in driving sustainable and inclusive growth in Asia, especially in the aftermath of the economic shocks caused by the coronavirus pandemic. It calls for continued investment in education, entrepreneurship, institutions, and dynamic urban centers to ensure long-term resilience and development.