- Contraction to take place first time in six years
- Dependency on tourism will make Maldives and Sri Lanka the worst hit in SA sub region
Due to the negative economic implications brought about by the ongoing global pandemic, the latest analysis by ADB reveals that the region will undergo a “difficult” growth path till the end of 2020, a journey Sri Lanka will very much be a part of.
While the GDP for developing Asia will contract by 0.7 percent, where the growth will rally to 6.8 percent in 2021, it is South Asia that will see its economic woes further deepen as COVID-19 spreads.
The sub region is now expected to shrink by a steep 6.8 percent in 2020 and rebound by 7.1 percent in 2021. The hardest hit will be Maldives and Sri Lanka as the two island nations are heavily dependent on tourism, highlighted ADB.
“The economic threat posed by the COVID-19 pandemic remains potent, as extended first waves or recurring outbreaks could prompt further containment measures.
“Consistent and coordinated steps to address the pandemic, with policy priorities focusing on protecting lives and livelihoods of people who are already most vulnerable, and ensuring the safe return to work and restart of business activities, will continue to be crucial to ensure the region’s eventual recovery is inclusive and sustainable,” said ADB Chief Economist Yasuyuki Sawada.
As about three-quarters of the region’s economies are expected to post negative growth in 2020, the 2012 output is expected to be below pre-COVID-19 projections, suggesting an ’L’ shaped rather than a ’V’ shaped recovery.