India, China to lead developing Asia rebound: ADB

India and China are expected to lead an economic rebound in vast developing Asia, the Asian Development Bank predicted on Wednesday, raising its growth forecast for the whole 45-nation region.

While India’s growth forecast of 11 per cent for 2021 is “achievable,” China is expected to grow 8.1 per cent this year, 5.5 per cent in 2022, the regional development bank said.

In its Asian Development Outlook report, the Manila-based lender predicted a growth of 7.3 per cent for developing Asia, compared with its previous forecast in December of 6.8 per cent and a contraction of 0.2 per cent in 2020 — but said the recovery would be “patchy.”

The ADB’s bullishness about the vast Asia-Pacific region, stretching from the Cook Islands in the Pacific to Kazakhstan in Central Asia, is based on the rollout of Covid-19 vaccines and the strength of global export demand, but the bank warned that resurgent virus outbreaks threatened the recovery.

South Asia will record the fastest economic recovery this year, with the ADB predicting an expansion of 9.5 per cent after a 6.0 per cent contraction in 2020, buoyed by India’s economic revival.

“Growth is gaining momentum across developing Asia, but renewed Covid-19 outbreaks show the pandemic is still a threat,” Yasuyuki Sawada, ADB chief economist, said in the report.

The ADB’s upbeat outlook for India — 11 per cent growth in 2021 after shrinking 8.0 per cent last year — could be revised as the country battles a huge surge in coronavirus infections, Sawada said.

However, he said, the forecast was still “achievable and realistic at this stage” given the low base of comparison, use of more targeted containment measures and speed of the country’s vaccination drive.

China, which expanded at its fastest pace on record in the first quarter, was expected to grow 8.1 per cent on the back of global demand for its products and pent-up domestic consumer spending. It grew 2.3 per cent in 2020.