IDEAS home Printed from https://ideas.repec.org/p/ris/adbiwp/1251.html
   My bibliography  Save this paper

Macroeconomic Impact of COVID-19 in Developing Asia

Author

Listed:
  • Yasuyuki Sawada

    (Asian Development Bank Institute)

  • Lea R. Sumulong

    (Asian Development Bank Institute)

Abstract

We summarize the unprecedented adverse health and economic impacts as well as policy responses in the Asia and Pacific region and the rest of the world generated by the coronavirus disease (COVID-19) pandemic in 2020. By the end of 2020, over 80 million people had been infected, with developing Asia accounting for 17% of cases. As the pandemic progressed, the Asian Development Bank (ADB) carried out assessments of the impacts on the global economy as well as on the overall economies of its developing members, updating the analyses as more information became available. On the whole, five economic impact assessments were undertaken in 2020 – one each in March, April, May, June, and December. Based on the latest analysis, relative to a no-COVID-19 baseline, global losses were estimated at 5.5%–8.7% of world GDP in 2020 and 3.6%–6.3% of world GDP in 2021, with the corresponding losses for developing Asia amounting to 6.0%–9.5% of regional GDP and 3.6%–6.3% of regional GDP in 2020 and 2021, respectively. These impacts largely originate from declines in domestic demand and tourism, and from global spillovers. As a result of these losses, real GDP of the developing Asian region is estimated to have contracted by 0.4% in 2020. A partial recovery is expected in 2021, with regional growth projected at 6.8%. Further analyses were carried out to study the impacts on micro, small, and medium-sized enterprises; employment; migration and remittances; poverty; nonperforming loans; and debt sustainability. Faced with wide-ranging unfavorable impacts, governments and multilateral lenders responded aggressively to mitigate the adverse effects of the pandemic. Many governments provided direct income support to households and businesses to help them cope with the economic shock. Meanwhile, multilateral lenders like ADB readily provided support in terms of finance, knowledge, and partnerships. In addition, ADB launched a $9 billion vaccine facility, the Asia Pacific Vaccine Access Facility, in December 2020, to support its low- and middle-income member countries in the effective procurement and delivery of COVID-19 vaccines. Despite the availability of vaccines, however, there is no room for complacency, as it will take years for the global population to achieve herd immunity, especially amidst the emergence of new, more transmissible, virus strains. While COVID-19 has brought about long-lasting changes to the global economy, it is up to policy makers to use this opportunity to adapt COVID-19 responses to address longer-term challenges.

Suggested Citation

  • Yasuyuki Sawada & Lea R. Sumulong, 2021. "Macroeconomic Impact of COVID-19 in Developing Asia," ADBI Working Papers 1251, Asian Development Bank Institute.
  • Handle: RePEc:ris:adbiwp:1251
    as

    Download full text from publisher

    File URL: https://www.adb.org/sites/default/files/publication/696296/adbi-wp1251.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yiping Huang & Ms. Longmei Zhang & Zhenhua Li & Han Qiu & Tao Sun & Xue Wang, 2020. "Fintech Credit Risk Assessment for SMEs: Evidence from China," IMF Working Papers 2020/193, International Monetary Fund.
    2. Jesus Felipe & Scott Fullwiler, 2020. "ADB COVID-19 Policy Database: A Guide," Asian Development Review, MIT Press, vol. 37(2), pages 1-20, September.
    3. Abdul Abiad & Mia Arao & Editha Lavina & Reizle Platitas & Jesson Pagaduan & Christian Jabagat, 2020. "The impact of COVID-19 on developing Asian economies: The role of outbreak severity, containment stringency, and mobility declines," Vox eBook Chapters, in: Simeon Djankov & Ugo Panizza (ed.), COVID-19 in Developing Economies, edition 1, volume 1, chapter 1, pages 86-99, Centre for Economic Policy Research.
    4. Abdul Abiad & Kristina Baris & John Arvin Bernabe & Donald Jay Bertulfo & Shiela Camingue-Romance & Paul Neilmer Feliciano & Mahinthan Joseph Mariasingham & Valerie Mercer-Blackman, 2018. "The Impact of Trade Conflict on Developing Asia," Working Papers id:12953, eSocialSciences.
    5. Wong, Grace, 2008. "Has SARS infected the property market Evidence from Hong Kong," Journal of Urban Economics, Elsevier, vol. 63(1), pages 74-95, January.
    6. Nguyen Doan & Canh Phuc Nguyen & Ilan Noy & Yasuyuki Sawada, 2020. "The Economic Impacts of a Pandemic: What Happened after SARS in 2003?," CESifo Working Paper Series 8687, CESifo.
    7. repec:aei:rpaper:1008560098 is not listed on IDEAS
    8. Yasuyuki Sawada, 2007. "The impact of natural and manmade disasters on household welfare," Agricultural Economics, International Association of Agricultural Economists, vol. 37(s1), pages 59-73, December.
    9. Liming Chen & David Raitzer & Rana Hasan & Rouselle Lavado & Orlee Velarde, 2020. "What Works to Control COVID-19?: Econometric Analysis of a Cross-Country Panel," ADB Economics Working Paper Series 625, Asian Development Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mahata, Sushobhan & Khan, Rohan Kanti & Chaudhuri, Sarbajit & Nag, Ranjanendra Narayan, 2022. "COVID-19 lockdown, family migration and unemployment in a gendered society," Research in Economics, Elsevier, vol. 76(3), pages 218-236.
    2. Gan-Ochir Doojav, 2023. "Macroeconomic Effects of Covid-19 in a Commodity-Exporting Economy: Evidence from Mongolia," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(5), pages 1323-1348, April.
    3. Chee-Hong Law & Chee-Lip Tee, 2023. "Impacts of COVID-19 and Related Government Policies on the Returns of the US Dollar Against the Malaysian Ringgit," Capital Markets Review, Malaysian Finance Association, vol. 31(1), pages 25-45.
    4. Doojav, Gan-Ochir, 2021. "Socio-economic recovery from the Covid-19 pandemic: Macroeconomic impacts and policy issues in Mongolia," MPRA Paper 111197, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Charles Ka Yui Leung & Joe Cho Yiu Ng & Edward Tang, 2020. "Why is the Hong Kong Housing Market Unaffordable? Some Stylized Facts and Estimations," Globalization Institute Working Papers 380, Federal Reserve Bank of Dallas.
    2. Athira, A. & Ramesh, Vishnu K., 2023. "COVID-19 and corporate tax avoidance: International evidence," International Business Review, Elsevier, vol. 32(4).
    3. Yoshito Takasaki, 2013. "Do natural disasters beget fraud victimization?: Unrealized coping through labor migration among the poor," Tsukuba Economics Working Papers 2013-002, Faculty of Humanities and Social Sciences, University of Tsukuba.
    4. Arouri, Mohamed & Nguyen, Cuong & Youssef, Adel Ben, 2015. "Natural Disasters, Household Welfare, and Resilience: Evidence from Rural Vietnam," World Development, Elsevier, vol. 70(C), pages 59-77.
    5. Willem THORBECKE & Nimesh SALIKE & Chen CHEN, 2020. "Product Complexity, Exports, and Exchange Rates: Evidence from the Japanese Chemical Industry," Discussion papers 20085, Research Institute of Economy, Trade and Industry (RIETI).
    6. Deng, Guoying & Gan, Li & Hernandez, Manuel A., 2015. "Do natural disasters cause an excessive fear of heights? Evidence from the Wenchuan earthquake," Journal of Urban Economics, Elsevier, vol. 90(C), pages 79-89.
    7. Fang, Yi & Wang, Qi & Wang, Fan & Zhao, Yang, 2023. "Bank fintech, liquidity creation, and risk-taking: Evidence from China," Economic Modelling, Elsevier, vol. 127(C).
    8. Yasuyuki SAWADA & Tatsujiro MASAKI & Hiroyuki NAKATA & Kunio SEKIGUCHI, 2017. "Natural Disasters: Financial preparedness of corporate Japan," Discussion papers 17014, Research Institute of Economy, Trade and Industry (RIETI).
    9. Wei, Feiqiong & Xie, Baiwei & Chen, Mingyan, 2025. "Digital financial inclusion, e-commerce development and entrepreneurial activity," International Review of Financial Analysis, Elsevier, vol. 97(C).
    10. Li, Haizheng & Liu, Qinyi & Ma, Mingyu, 2021. "How the COVID-19 Pandemic Affects Job Stress of Rural Teachers," IZA Discussion Papers 14366, Institute of Labor Economics (IZA).
    11. Yamamura, Eiji, 2012. "Natural disasters and their long-term effect on happiness: the case of the great Hanshin-Awaji earthquake," MPRA Paper 37505, University Library of Munich, Germany.
    12. Guoying Deng & Li Gan & Manuel A. Hernandez, 2013. "Do People Overreact? Evidence from the Housing Market After the Wenchuan Earthquake," NBER Working Papers 19515, National Bureau of Economic Research, Inc.
    13. Tobias Berg & Andreas Fuster & Manju Puri, 2022. "FinTech Lending," Annual Review of Financial Economics, Annual Reviews, vol. 14(1), pages 187-207, November.
    14. Gong, Zheng, 2021. "Can Digital Finance Promote the Technological Innovation of Agricultural Enterprises?—Evidence from NEEQ Companies in China," 2021 ASAE 10th International Conference (Virtual), January 11-13, Beijing, China 329419, Asian Society of Agricultural Economists (ASAE).
    15. Eiji Yamamura, 2013. "Public sector corruption and the probability of technological disasters," Economics of Governance, Springer, vol. 14(3), pages 233-255, August.
    16. Su, Tong & Tao, Yanyang & Wang, Jingyi, 2024. "FinTech adoption and the clustered development of rural e-commerce: Evidence from Taobao Village," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    17. Sandro Heiniger & Winfried Koeniger & Michael Lechner, 2022. "The Heterogeneous Response of Real Estate Asset Prices to a Global Shock," Swiss Finance Institute Research Paper Series 22-86, Swiss Finance Institute.
    18. Andrés Alonso Robisco & José Manuel Carbó Martínez, 2022. "Measuring the model risk-adjusted performance of machine learning algorithms in credit default prediction," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-35, December.
    19. Wang, Bingbing, 2022. "Housing market volatility under COVID-19: Diverging response of demand in luxury and low-end housing markets," Land Use Policy, Elsevier, vol. 119(C).
    20. Liu, Tao & Yu, Yanxin & Gong, Di & Guo, Min, 2024. "Geographic disparities in bank lending: Evidence from an auto loan market," Pacific-Basin Finance Journal, Elsevier, vol. 88(C).

    More about this item

    Keywords

    COVID-19; economic impact; policy response;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:adbiwp:1251. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ADB Institute (email available below). General contact details of provider: https://edirc.repec.org/data/adbinjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.