The Asian Development Bank (ABD) has cut its economic growth forecast for developing Asia for this year and next due to the emergence of the Omicron coronavirus variant.
In its latest outlook published on Tuesday, the Manila-based development bank forecast the region’s emerging economies would grow 7 percent in 2021 and 5.3 percent in 2022, down 0.1 percent from its previous estimate.
The bank cited a resurgence of COVID-19 cases due to the Omicron variant as the biggest risk to the region’s recovery, with other dangers including a prolonged slowdown in China’s housing market, rising inflation and global supply chain disruptions.
Among the major economies looked at, the ABD trimmed China’s growth forecast to 8 percent in 2021 and 5.3 percent next year, down 0.1 percent and 0.2, respectively, from its September estimate.
The bank cut India’s growth estimate to 9.7 percent for 2021, compared with 10 percent in September, with its 2022 estimate of 7.5 percent growth remaining unchanged.
Growth for Southeast Asia was cut to 3.1 percent for 2021, down 0.1 percent, but raised 0.1 percent to 5.1 percent for next year.
Regional inflation would stay “manageable”, the ABD said, with the price growth estimate revised down 0.1 percent to 2.1 percent for 2021 and unchanged at 2.7 percent for next year.
“Developing Asia’s steady progress in dealing with COVID-19, through continued vaccination drives and more strategic application of containment measures, helped boost growth prospects in the early part of the year,” ADB Acting Chief Economist Joseph Zveglich, Jr. said.
“However, new outbreaks in the third quarter muted gross domestic product growth, and the advent of the Omicron [corona]virus variant is causing renewed uncertainty. Recovery efforts will have to take these developments into consideration.”
In September, the bank trimmed its growth forecast for developing Asia to 7.1 percent, down from 7.3 percent in April, amid concerns about the Delta variant and uneven vaccine rollouts across the region.