|A view of Ho Chi Minh City, an economic hub in the south of Vietnam (Photo: VNA)
It made the forecast in a regular update to its annual flagship economic publication, the Asian Development Outlook (ADO) 2020, which was released in April.
Economic activity in Southeast Asia is expected to contract by 2.7% in 2020 before growing by 5.2% in 2021.
Contractions are forecast in key economies as containment measures to address the COVDI-19 pandemic have affected domestic consumption and investment, including Indonesia (-1.0%), the Philippines (-3.8%), and Thailand (-6.5%).
It also noted that developing Asian economies will barely grow in 2020 as coronavirus containment measures have hampered economic activity and weakened external demand.
The ADB projected growth of 0.1% for the region in 2020, down from the 2.2% forecast in April, which would be the slowest pace for the region since 1961.
It still maintained its 2021 forecast at 6.2% but said GDP levels in the year would remain below what had been envisioned and below pre-crisis trends.
“Economies in Asia and the Pacific will continue to feel the blow from the COVID-19 pandemic this year, even as lockdowns are slowly eased and select economic activities restart in a ‘new normal’ scenario,” said ADB Chief Economist Yasuyuki Sawada.
“While we see a higher growth outlook for the region in 2021, this is mainly due to weak numbers this year and this will not be a V-shaped recovery. Governments should undertake policy measures to reduce the negative impact of COVID-19 and ensure that no further waves of outbreaks occur,” he added.