ADB cuts Asia growth forecast on slow vaccine rollout
The Asian Development Bank warned of "lasting scars" from the coronavirus pandemic as it cut its 2021 growth forecast for developing Asia on slow vaccination rates, surging infections and crippling lockdowns.
A shortage of doses, which has hampered efforts to inoculate the vast region stretching from the Cook Islands in the Pacific to Kazakhstan in Central Asia, could worsen as evidence of waning vaccine protection increases demand for booster shots, the lender said Wednesday.
The Philippines-based ADB forecast growth of 7.1 per cent -- compared with its previous prediction in April of 7.3 per cent and a slight contraction in 2020 -- but said the recovery "remains fragile".
Vaccination rates have been uneven across the region, where less than a third of the population was fully protected against Covid-19 at the end of August, the lender said in an update of its flagship Asian Development Outlook.
That compared with more than 50 per cent coverage in the United States and nearly 60 per cent in the European Union.
The ADB warned that delayed vaccine rollouts and the emergence of new variants were among the biggest risks to the outlook -- and could have long-term damaging consequences. "Income losses caused by the pandemic in particular threaten to leave lasting scars and have a multidimensional effect on regional economies," the ADB said.
Progress on reducing poverty in developing Asia had been set back "at least two years", and prolonged school closures would lead to higher-than-expected learning and earning losses.
While the regional economy was expected to expand this year and next, the recovery had "diverged" in the first half of 2021 as the hyper-contagious Delta variant ripped through some countries.
In two-thirds of the developing Asian economies, the share of the population that has been fully vaccinated was 30 per cent or lower, the ADB said.
"Growth tended to be stronger in economies that had progressed the most in controlling the pandemic," it said.
East Asia, where vaccination rates were among the highest in the region and governments were quick to contain outbreaks, was set to grow 7.6 per cent this year, compared with an earlier forecast of 7.4 per cent. Forecasts were lowered for Southeast Asia and the Pacific, where nations have struggled to obtain enough doses to inoculate their populations as they battle fresh waves of infections.
Southeast Asia, including virus-ravaged Indonesia and the Philippines, was expected to grow 3.1 per cent this year, compared with a previous forecast of 4.4 per cent.
The ADB expects the Pacific to contract 0.6 per cent, after forecasting in April 1.4 per cent growth.