Mubasher: The International Monetary Fund (IMF) expected that Asia's economy will retreat by 1.6% for the first time in history during 2020, a downgrade from the expected zero growth in the Fund's April outlook.
The IMF warned that Asia's economy will take years to recover, according to the IMF's blog post on Tuesday, 30 June.
In 2021, the Asian economy is expected to recover to 6.6%, driven by the absence of a second wave of infections and the stimulus plan to support the recovery.
However, the economic output is forecast to continue declining to be 5% lower in 2022 when compared to the level predicted before the crisis.
Asia, whose economy mainly depends on global supply chains, is witnessing slower trade amid the weaker external demand caused by the economic repercussions of COVID-19 across the world.
Hence, Asia's trade would slip by nearly 20% in 2020 in Japan, India, and the Philippines, shifting Asia towards domestic demand instead of its reliance on exports.
The director of the Asia and Pacific Department at IMF, Chang Yong Rhee, said in the blog: "Asian countries are experimenting re-opening, and policies must be geared toward supporting the nascent recovery without exacerbating vulnerabilities. They must use fiscal stimulus wisely and complement it with economic reforms."