The Asian Development Bank (ADB) said that against the background of the spread of a new strain of coronavirus "omicron" and an increase in cases of coronavirus worldwide, the forecast for GDP growth in developing Asian countries has been revised downward.
The ADB said it now expects that by the end of 2021, the economy of developing Asian countries will expand by 7% after shrinking by 0.1% in 2020. Previously, the ADB had forecast growth of 7.1% in 2021. As for 2022, the growth forecast was also revised downwards to 5.3% from 5.4%.
"Developing Asian countries are likely to continue to show strong growth, but the appearance of the omicron strain is a reminder that further outbreaks of coronavirus remain possible," the ADB said.
Meanwhile, the ADB predicts that China's GDP growth will be 8% in 2021, while growth slowed to 5.3% in 2022.
As for inflation in developing Asia, the forecast for 2021 was lowered to 2.1%, while the forecast for next year remained unchanged (+2.7%). However, the ADB warned that the risks of rising inflation could prompt the US Federal Reserve to tighten policy earlier and provoke financial instability.