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The policy implemented by China to combat covid-19 will slow down during 2022 the economic expansion of the country that, for the first time in 30 years, will be surpassed in annual growth by the emerging economies of Asia, notes Wednesday the Asian Development Bank (ADB).
In an updated report, the Manila-based entity estimates that this year the Chinese economy will grow by 3.3 percent, downgrading the April forecast, which assessed growth at 5 percent, while in 2023 it also lowers the projection to 4.5 percent, compared to 4.8 percent previously.
The second world power, Asia’s main economic engine, will be overtaken for the first time in three decades, according to the ADB, by emerging countries such as India (which will grow by 7 percent), the Philippines (6.5 percent), Vietnam (6.5 percent), Pakistan (6 percent), Malaysia (6 percent) and Indonesia (5.4 percent), among others.
In contrast to other Asian countries that have eased the restrictions applied during the Covid-19 pandemic, Beijing maintains its ironclad strategy of zero contagion and continues to apply confinements.
These tough measures, together with the tightening of central banks’ monetary policies to curb inflation and the economic effects of the war in Ukraine, will affect China’s growth, according to the ADB.
“Growth in China faces challenges stemming from recurring confinements and a weak real estate sector,” Albert Park, the bank’s chief economist, notes in a statement.
Hao Zhang, ADB’s China expert, notes that Beijing’s confinements “have drastically slowed” growth, although it is expected to pick up in the second half of the year “with improving services and household demand.”
Park also warns that “risks lurk” for developing Asia, because “a significant downturn in the global economy would severely undermine demand for the region’s exports. A stronger than expected monetary tightening in advanced economies could generate financial instability.”
The agency also notes that inflation in China will be 2.3 percent in 2022, while in Asia’s developing economies it is set at an average of 4.5 percent.