ADB Cuts Outlook on Developing Asia Over Omicron Risks

The Asian Development Bank (ADB) dimmed its economic outlook for developing Asia until next year due to risks brought by persistent waves of COVID-19 infections and the new Omicron variant.

The Manila-based think tank now forecasts 7.1 percent growth this year, a little below the April projection of 7.3 percent, while expectations for 2022 are lower at 5.4 percent.

“Developing Asia remains vulnerable to the COVID-19 pandemic, as new variants spark outbreaks, leading to renewed restrictions on mobility in some economies,” said Joseph Zveglich, Jr., ADB chief economist, in a statement to their latest Asian Development Outlook report.

ADB highlighted that economic recovery across the region will be uneven. Export-oriented economies in East Asia are expected to benefit from the global surge of demand for goods, and high prices of oil and gas exports are seen to be helping Central Asia’s recovery.

Meanwhile, prospects for South Asia, Southeast Asia, and the Pacific are bleak due to low vaccination rates and continued lockdowns. Depressed tourism in tourist-dependent economies also weighs on economic recovery in these regions, according to ADB.

Inflation in developing Asia is expected to be manageable, ADB noted, which is seen at 2.2 percent this year and 2.7 percent next year. However, surging international prices could stoke inflation in some net importing countries in the region.

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