KUALA LUMPUR (Sept 22): The Asian Development Bank (ADB) has lowered its 2021 economic growth outlook for developing Asia amid continuing concerns over the coronavirus disease (Covid-19) pandemic.

In the September update of its flagship economic publication, the Asian Development Outlook (ADO) 2021, the ADB forecast a growth of 7.1% this year.

That compares with a projection of 7.3% in April.

Meanwhile, the growth outlook for 2022 was raised to 5.4% from 5.3%.

The ADB said new Covid-19 variants, renewed local outbreaks, the reinstatement of various levels of restrictions and lockdowns, and slow and uneven vaccine roll-outs are weighing down the region’s prospects.

ADB acting chief economist Joseph Zveglich, Jr said developing Asia remains vulnerable to the Covid-19 pandemic as new variants spark outbreaks, leading to renewed restrictions on mobility in some economies.

“Policy measures should not only focus on containment and vaccination, but also on continuing support for firms and households and reorienting sectors in the economy to adapt to the ‘new normal’ once the pandemic subsides to kick-start recovery,” he said.

The ADB expects an economic growth of 8.8% in South Asia this year, compared with the 9.5% forecast in April for the subregion.

However, it said the outlook for 2022 had improved to 7% from 6.6%.

The projection for India — the subregion's largest economy — was downgraded to 10% from 11% for 2021, while the outlook for next year improved to 7.5% from 7%.

Meanwhile, the forecasts for Southeast Asia and the Pacific were also revised downwards as economies in these subregions continue to grapple with new virus variants, continued lockdowns and restrictions, and slow vaccine roll-outs.

The growth projections for Southeast Asia for 2021 and 2022 were lowered to 3.1% and 5% respectively from forecasts of 4.4% and 5.1% in April.

The Pacific’s economy is set to contract 0.6% this year, compared to a 1.4% growth projected in April, before expanding 4.8% in 2022.

Inflation in developing Asia is expected to remain in check at 2.2% this year and 2.7% in 2022.

The current trend of higher international commodity and food prices could stoke inflation in some of the region’s economies.