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Economy

India and ASEAN growth forecasts cut amid COVID delta outbreak

ADB lowers emerging Asia's economic rebound to 7.2% in 2021

People shop at a crowded wholesale vegetable market after authorities eased coronavirus restrictions, following a drop in the COVID-19 cases, in the old quarters of Delhi, India, June 23.   © Reuters

MANILA -- India and Southeast Asia's economic rebound this year will be smaller than initially projected, the Asian Development Bank says in a new report released on Tuesday, due to the effects of the more virulent COVID-19 delta variant.

Outbreaks in those economies have dragged down the overall growth outlook of developing Asia, which is now projected to grow this year by 7.2% from 7.3%, according to an update to Asian Development Outlook, ADB's widely followed economic publication. It also upgraded next year's regional growth expectations to 5.4% from 5.3%.

China, the region's largest economy, is set to defy the broader slump, with growth outlook expected to remain intact at 8.1%, before normalizing to 5.5% in 2022.

Meanwhile, India's growth projection has been reduced by a percentage point to 10.0%, while that of Southeast Asia been slashed to 4.0% from 4.4% after a new wave of infections prompted fresh lockdowns in the sub-region. India and Southeast Asia are set to grow by 7.5% and 5.2%, respectively, next year.

Indonesia, Southeast Asia's largest economy and the new epicenter of coronavirus outbreak in Asia, is now expected to grow by 4.1%, instead of 4.5%, before expanding by 5.0% next year.

A healthcare worker in personal protective equipment takes a swab sample from a woman to test for COVID-19 during mass testing at a school in Jakarta on July 2.   © Reuters

The growth outlook at its delta variant-hit neighbors Malaysia, Thailand and Vietnam have also been downgraded. Malaysia's growth forecast has been trimmed to 5.5% from 6.0%, and is expected to grow 5.7% next year.

Thailand is set to expand by 2.0%, from the previous projection of 3.0%. It is tipped to rebound by 4.9% in 2022.

Vietnam's growth outlook has been slashed to 5.8% from 6.7%, and is projected to grow 7.0% next year.

Philippines, which last week announced the detection of the first local cases of delta variant, remains on track to grow by 4.5%, before expanding by 5.5% next year.

The Pacific sub-region is expected to grow 0.3%, slower than the 1.4% from previous projection, while Central Asia is expected to grow at a faster rate of 3.6% from 3.4%. Both sub-regions are projected to expand by 4.0% next year.

"Asia and the Pacific's recovery from the COVID-19 pandemic continues, although the path remains precarious amid renewed outbreaks, new virus variants, and an uneven vaccine rollout," said ADB Chief Economist Yasuyuki Sawada.

The ADB said vaccine rollout in the region is gaining pace, with 41.6 doses administered per 100 people by the end of June, above the global average of 39.2, but below rates of 97.6 in the U.S. and 81.8 in the European Union.

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