HONG KONG • Some of Asia's biggest economies are likely to narrowly avoid recession this year and are poised to bounce back strongly next year if the coronavirus is contained, said the International Monetary Fund (IMF), with China leading the recovery.
However, the more advanced economies in the region - Singapore, Japan, South Korea, Australia and Hong Kong - will dip into recession, according to the IMF forecast out yesterday.
Singapore's real gross domestic product (GDP) for this year is projected by the IMF to come in at minus 3.5 per cent, but to rebound next year with a 3 per cent growth. The Ministry of Trade and Industry in Singapore had earlier cut its full-year GDP growth forecast to a range of minus 4 per cent to minus 1 per cent.
The pandemic has hammered the world economy, with millions of jobs lost and businesses shut because of unprecedented lockdown measures.
But unlike the United States and major Western nations, China - the world's second-largest economy - will scrape through this year without going into recession, the IMF said in its latest World Economic Outlook. It predicted growth of 1.2 per cent for China this year, the slowest expansion in over four decades.
"Emerging Asia is projected to be the only region with a positive growth rate in 2020 (1 per cent), albeit more than 5 percentage points below its average in the previous decade," the IMF said. Other regions are projected to experience severe slowdowns or outright contractions in economic activity, it added.
The IMF forecast China to bounce back next year with 9.2 per cent. India, Asia's third-biggest economy, is also expected to grow at 1.9 per cent this year before surging 7.4 per cent next year. Indonesia too is expected to just stay above water, gaining 0.5 per cent this year before an 8.2 per cent bounce next year.
Thailand and Malaysia are expected to be in negative territory, but the Philippines and Vietnam are expected to still see modest growth this year.
China is expected to lead the economic recovery in Asia, and Beijing has unveiled a number of massive stimulus measures.
But economists have warned that China, where the virus first emerged late last year, will depend on recovery in other parts of the world. And the Chinese government's domestic measures like increased credit will have a limited effect as long as the rest of the world is in turmoil, analysts said.
"Beyond China's own domestic challenges, the global recession poses additional threat to the economy," Ms Chang Shu and Mr David Qu of Bloomberg Economics said in a note.
Overall, the global economy is projected to contract by 3 per cent this year - much worse than during the 2008-2009 financial crisis - and will mark the steepest downturn since the Great Depression of the 1930s, said the grim IMF forecast.
The scale of the challenge, especially for exports, was outlined last week when the World Trade Organisation warned that global trade could fall by as much as a third. Like the IMF, it had warned that many variables were at play during a recovery, such as the threat of a second wave of infections.
AGENCE FRANCE-PRESSE
