Sri Lanka’s gross domestic product will contract 5.5 percent in 2020 amid a Coronavirus crisis while tourism dependent Maldives will see its output tumble 20.5 percent, the Asian Development Bank has said.
Sri Lanka’s economic growth is expected to pick up to 4.1 percent in 2021 in part due to a low base, while Maldives may grow 10.5 percent.
Bangladesh will grow 5.2 percent, Bhutan 2.3 percent and Nepal 2.3 percent.
“Most economies in the Asia and Pacific region can expect a difficult growth path for the rest of 2020,” said ADB Chief Economist Yasuyuki Sawada said releasing an update to the lender’s Asian Development Outlook.
“The economic threat posed by the COVID-19 pandemic remains potent, as extended first waves or recurring outbreaks could prompt further containment measures.
“Consistent and coordinated steps to address the pandemic, with policy priorities focusing on protecting lives and livelihoods of people who are already most vulnerable, and ensuring the safe return to work and restart of business activities, will continue to be crucial to ensure the region’s eventual recovery is inclusive and sustainable.”
Vietnam is expected to grow 1.8 percent in 2020 and accelerate to 6.3 percent in 2021. Vietnam has monetary stability and free trade.
The governments of Sri Lanka and Vietnam have controlled the spread of Coronavirus providing the most valuable and durable ‘stimulus’ possible in the form of a safe environment to go back to work, analysts say.
Sri Lanka and Vietnam started containment measures in January 2020 having close links with China and ratcheted up measures in March when infected persons started to come from third countries in China.
China the source of the virus, which has also controlled the spread of Coronavirus, is expected to grow 1.8 percent in 2020 and 7.7 percent in 2021.
In India, where lockdowns have stalled consumer and business spending, GDP contracted by a record 23.9 percent in the first quarter and is forecasted to shrink 9 percent before recovering to 8 percent in 2021.
Inflation is generally expected to be muted amid weak domestic credit growth.