MANILA (Reuters) – Developing Asia’s economic rebound this year could be dented by the rapid spread of the Delta coronavirus variant, the Asian Development Bank said on Wednesday, as it urged economies to adapt to a ‘new normal’ after COVID-19 to underpin recovery.

In an update of its Asia Development Outlook Report, the ADB stated that 7.1% growth is forecast for developing Asia. This includes 46 countries within the Asia-Pacific. Its 7.2% projection in July was down from April’s 7.3%.

This year’s forecast of growth is up slightly from last year’s 0.1% contraction. The ADB maintained its forecast of 5.4% growth for Asia-Pacific in 2022.

ADB warned that the growth projections have risks due to the possibility of the new coronavirus varieties, slower than expected vaccine rollouts and decreasing vaccine effectiveness.

According to the ADB, 30% of the region’s population had been immunized as of August. This is a significant drop from advanced countries like the United States or the European Union that have fully vaccinated over half their populations.

Joseph Zveglich, ADB’s Acting Chief Economist, stated that “Developing Asia is still vulnerable to the COVID-19 Pandemic as new variants spark epidemics leading to renewed restrictions of mobility in some economies.”

ADB stated that the path to recovery in the region was uneven due to the different progress made by countries fighting the pandemic.

According to the ADB, China’s growth is expected to be 8.1% in 2018. However, its pace of expansion will slow to 5.5% next years.

Abdul Abiad, Director of ADB’s  Macroeconomic Research Division, noted in a media briefing that China’s property developer Evergrande’s debt problem, which have rattled global markets, “warrants careful monitoring.”

Housing is an essential component of the Chinese economy. Abiad stated that if the property sector was affected, it could have an impact on the wider Chinese economy.

Abiad also stated that China’s banks have sufficient capital to absorb an Evergrande-sized shock.

ADB maintained India’s growth forecast at 10.0% for this year, and 7.5% next.

New outbreaks from the Delta strain have taken a heavy toll on Southeast Asian economies. The ADB now projects that the region will grow at an even slower rate of 3.1% in 2015, compared to its July estimate of 4.0%. Strife-torn Myanmar is currently experiencing an 18.4% slump.

Zveglich suggested that policies should be more than just about vaccination and containment. It also needs to focus on reorienting the economy to adapt to the ‘new normal’ after the pandemic recedes.

GDP GROWTH

2020 2021 2021 2021 2022 2022 2022

APR JULY SEPT APR JULY SEPT

Central -1.9 3.4 3.6 4.1 4.0 4.0 4.2

Asia

East Asia 1.8 7.4 7.5 7.6 5.1 5.1 5.1

China 2.3 8.1 8.1 8.1 5.5 5.5 5.5

South Asia -5.6 9.5 8.9 8.8 6.6 7.0 7.0

India -7.3 11.0 10.0 10.0 7.0 7.5 7.5

SEast Asia -4.0 4.4 4.0 3.1 5.1 5.2 5.0

Indonesia -2.1 4.5 4.1 3.5 5.0 5.0 4.8

Malaysia -5.6 6.0 5.5 4.7 5.7 5.7 6.1

Myanmar 3.3 -9.8 n/a -18.4 n/a n/a n/a

Philippines -9.6 4.5 4.5 4.5 5.5 5.5 5.5

Singapore -5.4 6.0 6.3 6.5 4.1 4.1 4.1

Thailand -6.1 3.0 2.0 0.8 4.5 4.9 3.9

Vietnam 2.9 6.7 5.8 3.8 7.0 7.0 6.5

The Pacific -5.3 1.4 0.3 -0.6 3.8 4.0 4.8

Developing -0.1 7.3 7.2 7.1 5.3 5.4 5.4

Asia

INFLATION

2020 2021 2021 2021 2022 2022 2022

APR JULY SEPT APR JULY SEPT

Central 7.5 6.8 7.0 7.7 6.3 6.3 6.7

Asia

East Asia 2.2 1.5 1.5 1.4 2.2 2.2 2.2

China 2.5 1.5 1.5 1.3 2.3 2.3 2.3

South Asia 6.5 5.5 5.8 5.8 5.1 5.1 5.1

India 6.2 5.2 5.5 5.5 4.8 4.8 4.8

SEast Asia 1.2 2.4 2.3 2.2 2.4 2.4 2.4

Indonesia 2.0 2.4 2.1 1.7 2.8 2.8 2.7

Malaysia -1.1 1.8 2.0 2.5 2.0 2.0 2.3

Myanmar 5.7 6.2 n/a 6.2 n/a n/a n/a

Philippines 2.6 4.1 4.1 4.1 3.5 3.5 3.5

Singapore -0.2 1.0 1.3 1.6 1.2 1.2 1.4

Thailand -0.8 1.1 1.1 1.1 1.0 1.0 1.0

Vietnam 3.2 3.8 3.0 2.8 4.0 4.0 3.5

The Pacific 3.4 3.7 3.7 3.6 3.9 3.9 4.1

Developing 2.8 2.3 2.4 2.2 2.7 2.7 2.7

Asia