2nd wave threatens exports, warns ADB

The Asian Development Bank on Thursday cautioned the resurgence of COVID-19 in Europe and America poses risks to Bangladesh's exports.
"Economic activity in Bangladesh has recovered more strongly than expected with both exports and remittances growing in recent months but threatened by external risks as COVID-19 outbreaks renew in major export destinations," said the ADB in a new report.
The Manila-based lender, however, did not forecast any economic growth rate for Bangladesh in the report.
The ADB also painted a grim picture for the South Asian economic prospect as it said the GDP growth will be in the negative trajectory in the current year.
It said although South Asia's GDP growth has been projected a bit better in 2020, it would contract by 6.1 per cent at the end of the year due to the massive impact of COVID on the Indian economy.
However, the growth in South Asia is forecast to rebound to 7.2 per cent in the coming year 2021 as India is expected to grow positive from its negative trajectory.
The growth forecast for India, the sub-region's largest economy, for fiscal year (FY) 2020 was raised to -8.0 per cent, from the -9.0 per cent in September, while the outlook for FY2021 is kept at 8.0 per cent, the ADB said.
The lender said in the rest of South Asia, economic activity started to normalise from Q3 2020.
In Afghanistan, agriculture is robust, but the outlook is adversely affected by a new COVID-19 wave and intensified conflict even as peace talks continue.
In Bhutan, the impact of COVID-19 is now expected to be greater than projected after a nationwide lockdown in August and September halted all economic activity.
The Maldives restored more international flights in October, but travel demand remains weak as restrictions are reinstated in major European markets, hampering the tourism recovery.
On the inflation projection, the ADB's supplementary report said the average inflation in Bangladesh rose to 5.9 per cent in the first four months of FY2021, to be ended in June 2021.
About the Asia's economic outlook, the ADB said economic activity in developing Asia is forecast to contract by 0.4 per cent this year, before picking up to 6.8 per cent in 2021 as the region moves toward recovery from the effects of the coronavirus disease.
"The outlook for developing Asia is showing improvement. Growth projections have been upgraded for China and India," said ADB chief economist Yasuyuki Sawada.
"A prolonged pandemic remains the primary risk, but recent developments on the vaccine front are tempering this. Safe, effective, and timely vaccine delivery in developing economies will be critical to support the reopening of economies and the recovery of growth in the region," he added.

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