The World Bank’s projections suggest that the region will bear the scars of COVID-19 for many years to come.
The Asia-Pacific region will experience a lopsided recovery from the economic effects of the coronavirus pandemic, the World Bank said in its latest economic outlook for the region, due to uneven containment of the disease and widely varying vaccine distribution timelines.
The World Bank’s East Asia and Pacific Economic Update, released on March 26, predicts that the region’s economy is set to grow by 7.4 percent as a whole, up from a paltry 1.2 percent in 2020. This will be driven overwhelmingly by a surge in economic growth form China, which the report projected to grow by 8.1 percent this year, compared with 2.3 percent last year – by far the largest projected growth rate for the region.
Excluding China, growth will be just 4.4 percent across East Asia and the Pacific, an improvement on the 3.7 percent contraction that the region saw 2020, but still below the region’s long-term average.
According to the report, the region will experience a “three-speed recovery” from the coronavirus pandemic, largely due to spot fire COVID-19 outbreaks and expected delays in the distribution of vaccines across the region.
“Like Hydra, the many-headed monster of Greek myth, COVID-19 is proving hard to suppress even a year after the first case was confirmed in Wuhan,” the report stated, noting that Malaysia, Cambodia, Myanmar, Mongolia, and Thailand have all seen recent outbreaks after months of relatively low caseloads.
According to the report, only China and Vietnam have surpassed pre-pandemic levels of growth, while for most major economies output remained on average around 5 percent below pre-pandemic levels. Hardest hit of all have been the Pacific Island countries, five of which – Samoa, Tonga, Palau, the Marshall Islands, and the Federated States of Micronesia – are set to experience a further year of negative growth in 2021.
Economic performance has depended on the effectiveness of virus containment, the ability to take advantage of the revival of international trade, and the capacity of governments to provide fiscal and monetary support. Countries that have been unable to fully restore export industries, or which are overly dependent on tourism, will see the steepest challenges in achieving even modest growth in 2021.