(Yicai Global) April 3 -- China's economic growth will leap to 7.3 percent in 2021 as it bounces back from the impact of Covid-19, according to a report published by the Asian Development Bank today.
Expansion will return to normal growth the following year, the bank said in its Asian Development Outlook 2020. The pandemic will cause a sharp contraction in industry, services, retail and investment in the first quarter of this year, ultimately dragging growth down to about 2.3 percent, compared with 6.1 percent last year.
"The evolution of the global pandemic -- and thus the outlook for the global and regional economy -- is highly uncertain," said ADB Chief Economist Yasuyuki Sawada. "Growth could turn out lower, and the recovery slower, than we are currently forecasting. For this reason, strong and coordinated efforts are needed to contain the COVID-19 pandemic and minimize its economic impact, especially on the most vulnerable."
Across Asia, the ABD predicts growth will fall to 2.2 percent this year, some 3.3 points lower than the lender's forecast in September 2019. It expects expansion to rebound to 6.2 percent in 2021 so long as the outbreak ends and activity normalizes.
Much of the weakness across Asia is a deteriorating external environment, with growth stagnating or contracting in major industrial economies like the United States, the European Union, and Japan, it added. The bank expects growth to fall at all of developing Asia's subregions due to weak global demand, and in some economies because of domestic outbreaks and containment policies.
Economically open subregions, like East and Southeast Asia, and tourism-dependent economies in the Pacific will be hit hard, the report added, saying economic activity in the Pacific subregion could contract by 0.3 percent this year before recovering to 2.7 percent in 2021.
Editor: James Boynton