MANILA -- Emerging Asian economies are expected to grow at their slowest pace this year in 22 years, due to the coronavirus pandemic that has shut down business activity in large swathes of the world, the Asian Development Bank said in a report on Friday.
The ADB also warned of financial crises and estimated that the outbreak will likely knock $2.0 trillion to $4.1 trillion, or 2.3%-4.8%, off the world's gross domestic product in 2020.
In developing Asia, the bank said growth will fall to 2.2% this year, the slowest since the 1.7% expansion in 1998, a year after the Asian financial crisis broke out.
Regional growth, which slowed to 5.2% last year amid the U.S.-China trade war, could rebound to 6.2% next year, assuming the virus is brought under control and economic activity resumes as before.
"No one can say how widely the COVID-19 pandemic may spread, and containment may take longer than currently projected," ADB Chief Economist Yasuyuki Sawada said in the bank's widely followed economic publication Asian Development Outlook. "The possibility of severe financial turmoil and financial crises cannot be discounted."
China, where the virus first emerged in January, will likely grow 2.3% this year, down from 6.1% last year. It is poised for a recovery to 7.3% next year.
Tourism and commodity industries have been battered by travel bans and the lockdown of cities. Nine Asian economies that rely on these sectors are likely to shrink, the ADB said. These economies are: Thailand (-4.8%), Hong Kong (-3.3%), the Maldives (-3.0%), Timor Leste (-2.0%), Fiji (-4.9%), Vanuatu (-1.0%), Cook Islands (-2.2%), Palau (-4.5%) and Samoa (-3.0%).
With five Pacific economies expected to shrink, the region will likely contract by 0.3%, before recovering to 2.7% next year.
Countries that have robust trade ties with China, which itself is facing slowing growth, are also headed for a sharp deceleration. After growing 4.4% last year, Southeast Asia is predicted to expand by 1.0% this year, before recovering to 4.7% next year.
Vietnam is expected to outperform with 4.8% growth in 2020, before surging to 6.8% in 2021.
After growing by 5.1% last year, South Asia is set to grow 4.1% this year and 6.0% next. India, the region's largest economy, is seen to expand in 2020 by 4.0% amid a credit crunch, before picking up steam next year with 6.2% expansion.
"COVID-19 has not yet spread extensively in India, but measures to contain the virus and a weaker global environment will whip up headwinds," the ADB said.
Central Asia, home to oil-producers such as Kazakhstan and Azerbaijan, will grow 2.8% in 2020 before expanding by 4.2% next year amid lower global commodity prices.
Sawada said the only way to stop the spread of the virus was by "strong and coordinated" efforts, particularly for vulnerable communities. He also said that growth may still be revised down.
"The evolution of the global pandemic -- and thus the outlook for the global and regional economy -- is highly uncertain," Sawada said. "Growth could turn out lower, and the recovery slower, than we are currently forecasting."