DEVELOPING Asia’s economic rebound this year could be dented by the rapid spread of the Delta coronavirus variant, the Asian Development Bank (ADB) said yesterday, as it urged economies to adapt to a “new normal” after COVID-19 to underpin recovery. Growth in developing Asia, which groups 46 countries in the Asia-Pacific, is projected to reach 7.1 percent this year, the Manila-based multilateral bank said in an update to its Asia Development Outlook report, down from its 7.2 percent forecast in July and 7.3 percent in April. Developing Asia includes China, South Korea, India, Singapore and other countries across southern, eastern and central Asia, as well as the Pacific. It excludes Japan, Australia and New Zealand. Since ADB published its previous batch of forecasts in April, Asia has been hit by surges of COVID-19 and the highly contagious Delta variant. Countries’ varying degrees of responsiveness continues to contribute to diverging paths of recovery. The bank continues to expect southern and eastern Asia to be the main engines of growth, largely due to powerhouses India and China. India has been battered by COVID-19, but ADB still forecasts double-digit growth for the country this year, though at 10 percent versus 11 percent previously. China’s growth view is maintained at 8.1 percent. “The recovery in global demand for exports from developing Asia, supported by robust growth in advanced economies, will continue to benefit the region’s export-oriented economies,” it said. ADB noted that growth in the largest economies accelerated in the first half of the year from the preceding six months, particularly in countries like Singapore and China, which quickly rolled out vaccines and reined in outbreaks. That allowed them to avoid reimposing lockdowns and tap the rebound in global demand. Places like Thailand that were slower to vaccinate were held back by fresh waves of infections. ADB’s growth forecast for Malaysia, which reimposed mobility restrictions several times this year to curb outbreaks, was cut to 4.7 percent from 6 percent, while Thailand’s was slashed to 0.8 percent from 3 percent. “Developing Asia’s progress on vaccination remains uneven and lags behind the rollout in advanced economies,” ADB said, noting that as of the end of August, 28.7 percent of the population had been fully vaccinated, compared with 51.8 percent in the United States and 58 percent in the European Union. Rising inflation remains a key focal point, particularly in the face of surging global commodity prices, but the bank thinks it remains largely in check and close to the targets of most central banks in the region. It expects inflation in developing Asia to remain moderate at 2.2 percent this year before accelerating to 2.7 percent in 2022. That compares with the 2.3 percent figure the bank projected in its April outlook. ADB reckons the recovery should continue to be supported by expansionary fiscal and monetary policies, noting that most central banks have refrained from raising policy rates after cutting them in 2020. (SD-Agencies) | 