Asian Development Outlook 2021: ADB

In News

Recently, Asian Development Bank has released its flagship Asian Development Outlook (ADO) 2021. 

About

• Asian Development Outlook (ADO) is a series of annual economic reports on the Developing Member Countries (DMCs) of the Asian Development Bank (ADB).
• An uncertain pandemic trajectory with a prolonged second wave of Coronavirus pandemic despite the vaccination push can affect India’s economic normalization.
• The forecast by ADB, expects the economic impact of the second wave to be relatively low compared to the first wave in line with the global experience.

Major Highlights

• Growth Projection
• India: It projects India’s gross domestic product (GDP) will rebound strongly by 11.0% in fiscal year (FY) 2021-22 due to continued economic recovery boosted by increased public investment, vaccine rollout, and a surge in domestic demand.
  • It forecasts India’s economic growth to moderate to 7.0% in FY2022.
  • The economy is expected to have contracted by 8.0% in FY2020 in line with the government’s second advance estimate.

• Developing Asia: The gross domestic product (GDP) of South Asia is expected to rebound to 9.5% this year, following a contraction of 6% in 2020, before moderating to 6.6% next year (2022).
  • The region’s growth is forecast to moderate to 5.3% in 2022 and most economies in developing Asia will see healthy growth this year and in 2022. 
  • Excluding the newly industrialized economies of Hong Kong, China; the Republic of Korea; Singapore; and Taipei, China, developing Asia’s economic activity is expected to grow 7.7% this year and 5.6% in 2022.
  • China’s gross domestic product (GDP) is forecast to expand 8.1% in 2021 and 5.5% in 2022. 
  • Developing Asia comprises 46 members of ADB list on the basis of geographic group.
    • India is also part of Developing Asia.

• Challenges Faced by the Asian Economies
• Increasing Geopolitical tensions.
• Financial turmoil from tightening financial conditions.
• Production bottlenecks.
• Long term scarring. This includes learning losses due to school closures.
• Learning and Earning Losses from COVID-19 School Closures
• The COVID-19 pandemic severely disrupted education. Schools were closed to varying degrees across developing Asia. 
• Though, remote learning strategies were deployed in most economies to keep students learning. But many students are constrained by access to resources like computers and the internet. 
• Students in developing Asia have lost 29% of a year of learning on average.
• Estimates show that students affected by school closures stand to lose an average of $180 or a 2.4% decline in expected annual earnings.
• Indian Analysis Favouring Economic Growth
• Increased expenditure by the Indian Government on water, health care, and sanitation will strengthen the nation’s resilience against future pandemics.
• Private investment has been expected to pick up as well as the accommodative credit conditions.
• A faster vaccine rollout will help in increasing the urban demand or the services while the rural demand will be boosted by the government’s support to farmers and agricultural growth.
• The agricultural sector will be further boosted by the forecast of a normal monsoon and the bumper harvest of the summer crops.
• Push to the manufacturing sector by the Indian Government through the production-linked incentive scheme will further expand domestic production ang global supply chains.
• Policies to Minimize Learning and Earning Losses
• Continue strengthening information and communication technology infrastructure. Heavy connectivity use during the COVID-19 pandemic has tested the limits of these networks in several countries.
• Continue to use diverse modalities to provide accessible learning experiences for students in remote areas. Where online learning is not possible, these modalities can include television, radio courses, and paper-based learning.
• Continue to provide devices for children from disadvantaged backgrounds
• Provide systematic training on digital literacy for students and parents, and effective remote pedagogy for Teachers.
• Develop and maintain a feedback loop between developers and administrators of remote learning platforms.
• Encourage social interaction between students, teachers, and parents within the remote learning environment.

Source: TH