Afghanistan’s gross domestic product (GDP) is expected to contract by 5% this year, according to a new report released by the Asian Development Bank (ADB) on Tuesday.
Economies across developing Asia will contract this year for the first time in nearly six decades but recovery will resume next year, as the region starts to emerge from the economic devastation caused by the COVID-19 pandemic, according to ADB
The Asian Development Outlook (ADO) 2020 Update forecasts -0.7% gross domestic product (GDP) growth for developing Asia this year – marking its first negative economic growth since the early 1960s.
Growth will rally to 6.8% in 2021, in part because growth will be measured relative to a weak 2020.
About three-quarters of the region’s economies are expected to post negative growth in 2020.
“Most economies in the Asia and Pacific region can expect a difficult growth path for the rest of 2020,” said ADB Chief Economist Yasuyuki Sawada.
“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.”
For Afghanistan, the projected growth rate in 2021 is 1.5% while the inflation rates are forecasted at 5% in 2020 and 4.5% in 2021.
A prolonged COVID-19 pandemic remains the biggest downside risk to the region’s growth outlook this year and next year. Other downside risks arise from geopolitical tensions, including an escalation of the trade and technology conflict between the U.S. and China, as well as financial vulnerabilities that could be exacerbated by a prolonged pandemic.