Abdul AbiadDirector, Macroeconomic Research, ADB
June 2020
1
SUPPLEMENTLockdown, Loosening, and Asia’s Growth Prospects
Outline of Discussion
• Overview of forces now reshaping Asian economies
• The outlook for the region
• Selected topics (depending on interest):
• Investment prospects in Asia—what has happened to financial markets?
• The future of globalization and supply chains
• Prospects for post-COVID Asia and its role in the global economy
2
COVID-19 has continued to spread globally...Since April, total COVID-19 cases worldwide have risen from less than a million to over 13 million by 15
July, with developing Asia accounting for 14.4% of the total
COVID-19 cases worldwide, new cases daily
Sources: CEIC Data Company; World Health Organization (accessed 16 July 2020).
3
COVID-19 cases worldwide, cumulative
…and across much of developing Asia.
COVID-19 cases by subregion, cumulative
Domestic outbreaks have occurred in more economies in the region, with 22 of the ADB’s 46 developing members recording more than 1,000 cases each
COVID-19 cases by subregion, new cases daily
Sources: CEIC Data Company; World Health Organization (accessed 16 July 2020).
4
Governments imposed containment measures of varying stringency, which reduced mobility…
COVID-19 Government Response Stringency Index
Note: The Government Response Stringency index is a composite measure of nine response indicators including school closures, workplace closures, and travel bans, rescaled to a value from 0 to 100, with 100 being the strictest responseSource: University of Oxford. 5
HKG
MON
ROKTAP
GEO
KAZ
KGZ
AFG
BAN
INDNEP
PAK
SRI
INO
LAO
MAL
MYA
PHI
SIN
THA
VIE
-60
-50
-40
-30
-20
-10
0
10
20
30
0 20 40 60 80 100
Average stringency index
East AsiaCentral AsiaSouth AsiaSoutheast AsiaThe PacificLinear (Trend line)
Aver
age
mob
ility
out
side
resid
ence
, pe
rcen
tage
cha
nge
from
the
base
line
PNG
FIJ
CAMTAJ
AFG = Afghanistan, BAN = Bangladesh, CAM = Cambodia, FIJ = Fiji, GEO = Georgia, HKG = Hong Kong, China, IND = India, INO = Indonesia, KAZ = Kazakhstan, KYR = Kyrgyz Republic, LAO = Lao People’s Democratic Republic, MAL = Malaysia, MON = Mongolia, MYA = Myanmar, NEP = Nepal, PAK = Pakistan, PNG = Papua New Guinea, PHI = Philippines, ROK = Republic of Korea, SIN = Singapore, SRI = Sri Lanka, TAJ = Tajikistan, TAP = Taipei,China, THA = Thailand, VIE = Viet Nam.Sources: ADB estimates using data from University of Oxford. Our World in Data. https://ourworldindata.org/grapher/covid-stringency-index; Google. Community Mobility Reports. https://www.google.com/covid19/mobility/.
Stringency and mobility in developing Asia
…and affected economic activity.
Q1 2020 stringency, mobility, and Q1 GDP growth declines
AUT = Austria, BEL = Belgium, BGR = Bulgaria, CAN = Canda, CHL = Chile, CHN=People’s Republic of China, COL = Columbia, CYP = Cyprus, DEU = Germany, DNK = Denmark, ESP = Spain, EST = Estonia, FIN = Finland, FRA = France, GBR = United Kingdom, GEO = Georgia, HKG = Hong Kong, China, HUN = Hungary, IDN = Indonesia, ISR = Israel, ITA = Italy, JPN = Japan, KOR = Republic of Korea, LTU = Lithuania, LTV = Latvia, MAR = Morocco, MEX = Mexico, MNG = Mongolia, MYS = Malaysia, NGA = Nigeria, NLD = Netherlands, NOR = Norway, PER = Peru, PHL = Philippines, POL = Poland, ROU = Romania, RUS = Russia, SGP = Singapore, SVK = Slovakia, SWE = Sweden, THA = Thailand, TWN = Taipei,China, UKR = Ukraine, USA = Unites States, VNM = Viet Nam.
Source: Abiad et al., 2020, “The impact of COVID-19 on developing Asian economies: The role of outbreak severity, containment stringency, and mobility declines,” in COVID-19 in Developing Economies, CEPR e-book.
6
Outbreak severity, stringency of lockdowns, and reduced mobility all correlate with revisions to C and I growth.
Regression of Consumption and Investment Revisions on Stringency, Mobility, and Outbreak Severity
Robust standard errors in parentheses. Collinearity between average stringency and average mobility (correlation -0.82) results in both variables becoming insignificant if included simultaneously, as in columns 6 and 12. *** p<0.01, ** p<0.05, * p<0.1
Source: Abiad et al., 2020, “The impact of COVID-19 on developing Asian economies: The role of outbreak severity, containment stringency, and mobility declines,” in COVID-19 in Developing Economies, CEPR e-book.
7
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)VARIABLES
Average stringency -0.0653** -0.0592*** -0.0219 -0.134*** -0.122*** -0.0224(0.0255) (0.0204) (0.0271) (0.0330) (0.0281) (0.0604)
Average mobility 0.0558** 0.0530** 0.0387 0.111*** 0.107*** 0.0896(0.0258) (0.0208) (0.0308) (0.0364) (0.0287) (0.0632)
Log cases per million -0.628** -0.572*** -0.718*** -0.715*** -1.205*** -1.082*** -1.097*** -1.088***(0.231) (0.186) (0.169) (0.165) (0.426) (0.329) (0.322) (0.327)
Constant -2.962 -5.583*** -3.568** 0.285 -1.033 0.0449 -1.846 -7.409*** -3.437 4.300 -0.458 0.392(1.783) (0.892) (1.535) (1.689) (1.191) (1.424) (2.530) (1.490) (2.721) (2.765) (2.290) (2.832)
Observations 36 34 37 36 34 33 36 34 37 36 34 33R-squared 0.192 0.181 0.189 0.349 0.430 0.455 0.226 0.226 0.196 0.384 0.410 0.411
Revisions to 2020 Consumption growth forecast Revisions to 2020 Investment growth forecast
The global environment will be weak, as many economies also deal with their own outbreaks.
Baseline assumptions on the international economy
20192020 2021
ADO ADOS ADO ADOSGDP growth (%)
Major advanced economies 1.7 -0.3 -5.8q 1.8 4.1 p
United States 2.3 0.4 -5.3q 2.1 3.8 p
Euro area 1.2 -1.0 -7.0q 1.6 5.5 p
Japan 0.7 -1.5 -5.0q 0.9 2.0 p
Brent crude spot prices (average, $ per barrel)
64.03 35.00 35.00 55.00 45.00 q
Major advanced economies are set to contract after already slowing in 2019.
p = upgraded forecast, q = downgraded forecast, no sign = unchanged.
Sources: Bloomberg, Haver Analytics, ADB estimates. 8
We are in the midst of a global tourism collapse, and a full recovery in travel and tourism will take time…
Decline in tourist arrivals, selected developing Asian economies
For the 24 economies with tourist arrivals data available for April, the year-on-year decline in arrivals ranges from 87% to
100%.
Note: April data for Cook Islands is a mirror data of arrivals from AUS/NZL.Sources: CEIC Data Company; IMF Tourism Tracker; and country official sources. 9
Travel plans after bans are lifted
22%
45%
23%
7%3%
14%
47%
28%
8%4%
12%
33%36%
14%
5%
0
5
10
15
20
25
30
35
40
45
50
Not wait at all Wait a month ortwo
Wait six months orso
Wait a year or so Not travel for theforeseeable future
February Survey April Survey June Survey
Source: IATA
55% of respondents said that even after travel restrictions are lifted, they would wait six months to a year or more before traveling—or they had set aside travel plans altogether.
-86.9
-100
-80
-60
-40
-20
0
20
40
Jan 2019 Apr Jul Oct Jan 2020 Apr Jun
% change year on year
Sri Lanka Thailand IndonesiaTaipei,China Nepal Viet NamRep. of Korea Hong Kong, China GeorgiaIndia Singapore Maldives
…implying a substantial decline in tourism receipts for many economies.
COVID-19’s impact on international tourism receipts in developing Asia, % of GDP
Source: Abiad et al., forthcoming.10
AFG = Afghanistan, ARM = Armenia, AZE = Azerbaijan, BAN = Bangladesh, BHU = Bhutan, BRU = Brunei Darussalam, CAM = Cambodia, COO = Cook Islands, FSM = Federated States of Micronesia, FIJ = Fiji, GEO Georgia, HKG = Hong Kong, China, IND = India, INO = Indonesia, KAZ = Kazakhstan, KIR = Kiribati, KYR = Kyrgyz Republic, LAO = Lao People’s Dem. Rep., MAL = Malaysia, MLD = Maldives, MAR = Marshall Islands, MON = Mongolia, MYA = Myanmar, NAU = Nauru, NEP = Nepal, PAK = Pakistan, PAL = Palau, PNG = Papua New Guinea, PRC = People’s Republic of China, PHI = Philippines, KOR = Republic of Korea, SAM = Samoa, SIN = Singapore, SOL = Solomon Islands, SRI = Sri Lanka, TAP = Taipei,China, TAJ = Tajikistan, THA = Thailand, TIM = Timor-Leste, TON = Tonga, TUV = Tuvalu, UZB = Uzbekistan, VAN = Vanuatu, and VIE = Viet Nam.
-50
-40
-30
-20
-10
0
MLD
CO
O
PAL
VAN
NIU
FIJ
SAM
GEO
CAM
THA
HKG
TON
ARM
RM
I
FSM
SOL
SRI
MAL
AZE
KYR
SIN
BHU
TAP
LAO
VIE
MO
N
TIM
TUV
PHI
KIR
UZB
NEP
MYA
TAJ
INO
KAZ
BRU
NAU
KOR
IND
PAK
AFG
PRC
BAN
PNG
% o
f GD
P
Shorter containment
Longer containment
Global spillovers will be greater for the region’s more open economies.
Calculated global spillovers (%of GDP) and exports to GDP under shorter and longer containment scenarios
BGD=Bangladesh, BTN=Bhutan, BRN=Brunei Darussalam, KHM=Cambodia, CHN=China, FJI=Fiji, HKG=Hong Kong, China, IND=India, IDN=Indonesia, KAZ=Kazakhstan, KOR=Republic of Korea, KGZ=Kyrgyz Republic, LAO=Lao PDR, MYS=Malaysia, MDV=Maldives, MNG=Mongolia, NPL=Nepal, PAK=Pakistan, PHL=Philippines, SGP=Singapore, LKA=Sri Lanka, TWN= Taipei,China, THA=Thailand , VNM= Viet Nam
Source: Abiad et al., 2020, “The impact of COVID-19 on developing Asian economies: The role of outbreak severity, containment stringency, and mobility declines,” in COVID-19 in Developing Economies, CEPR e-book.
11
COVID-19’s impact will thus work through different channels across economies…
COVID-19’s impact on developing Asia GDP (relative to no-COVID baseline), under shorter-containment scenario
Source: : Abiad et al., forthcoming. 12
Note: Domestic demand declines are assumed only for economies with significant outbreaks (more than 1,000 cases). Does not account for any policy responses.AFG = Afghanistan, ARM = Armenia, AZE = Azerbaijan, BAN = Bangladesh, BHU = Bhutan, BRU = Brunei Darussalam, CAM = Cambodia, COO = Cook Islands, FSM = Federated States of Micronesia, FIJ = Fiji, GEO Georgia, HKG = Hong Kong, China, IND = India, INO = Indonesia, KAZ = Kazakhstan, KIR = Kiribati, KYR = Kyrgyz Republic, LAO = Lao People’s Dem. Rep., MAL = Malaysia, MLD = Maldives, MAR = Marshall Islands, MON = Mongolia, MYA = Myanmar, NAU = Nauru, NEP = Nepal, PAK = Pakistan, PAL = Palau, PNG = Papua New Guinea, PRC = People’s Republic of China, PHI = Philippines, KOR = Republic of Korea, SAM = Samoa, SIN = Singapore, SOL = Solomon Islands, SRI = Sri Lanka, TAP = Taipei,China, TAJ = Tajikistan, THA = Thailand, TIM = Timor-Leste, TON = Tonga, TUV = Tuvalu, UZB = Uzbekistan, VAN = Vanuatu, and VIE = Viet Nam.
-35
-30
-25
-20
-15
-10
-5
0
ARM
AZE
GEO
KAZ
KGZ
TAJ
TKM
UZB
PRC
HKG
ROK
MO
NTA
P
BRU
CAM
INO
LAO
MA
LM
YAPH
ISI
NTH
ATI
MVI
E
AFG
BAN
BHU
IND
MLD
NEP
PAK
SRI
COO
FIJ
FSM
KIR
RMI
NAU
PAL
PNG
SOL
TOM
TUV
VAN
SAM
% i
mpa
ct o
n GD
P, re
lativ
e to
no-
COVI
D ba
selin
e
Global Spillovers (excluding tourism)
International tourism demand decline
Domestic demand decline
Central East Southeast South Pacific
and will have differential impact across sectors.COVID-19’s sectoral impact on developing Asian economies, under shorter-containment scenario
Source: : Abiad et al., forthcoming.13
Note: Sectoral impacts are available only for 24 developing Asian economies covered by the ADB Multi-Region Inout-Outout Tables (MRIOT)BAN = Bangladesh, BHU = Bhutan, BRU = Brunei Darussalam, CAM = Cambodia,, FIJ = Fiji, HKG = Hong Kong, China, IND = India, INO = Indonesia, KAZ = Kazakhstan,, KYR = Kyrgyz Republic, LAO = Lao People’s Dem. Rep., MAL = Malaysia, MLD = Maldives, MON = Mongolia, NEP = Nepal, PAK = Pakistan, PRC = People’s Republic of China, PHI = Philippines, KOR = Republic of Korea, SIN = Singapore, SRI = Sri Lanka, TAP = Taipei,China, THA = Thailand, and VIE = Viet Nam.
-35.0
-30.0
-25.0
-20.0
-15.0
-10.0
-5.0
0.0KAZ KYR PRC HKG KOR MON TAP BRU CAM LAO INO MAL PHI SIN THA VIE BAN BHU IND MLD NEP PAK SRI FIJ
Agriculture, Mining and Quarrying Business, Trade, Personal, and Public ServicesLight/Heavy Manufacturing, Utilities, and Construction Hotel and restaurants and Other Personal ServicesTransport services
Central East Southeast South Pacific
COVID-19 will result in a loss of $6.1–$9.1 trillion (7.1%–10.5%) of global GDP vs. a no-COVID baseline.
Estimated global and regional losses due to COVID-19 (relative to a no-COVID baseline)
Source: Abiad et al., 2020, “The impact of COVID-19 on developing Asian economies: The role of outbreak severity, containment stringency, and mobility declines,” in COVID-19 in Developing Economies, CEPR e-book.
14
Shorter- containment Longer- containment Shorter- containment Longer- containmentWorld -7.1 -10.5 -6,065.7 -9,051.6Developing Asia -5.7 -8.5 -1,309.8 -1,955.4
Central Asia -8.6 -12.7 -31.1 -46.3East Asia -5.1 -7.6 -820.5 -1,227.2Southeast Asia -7.2 -10.6 -213.0 -315.4South Asia -7.0 -10.4 -243.6 -364.1The Pacific -4.8 -7.1 -1.7 -2.4
United States -8.0 -12.0 -1,646.6 -2,461.8Europe -9.1 -13.6 -1,715.1 -2,556.6Rest of the world -5.9 -8.8 -1,394.2 -2,077.7
GDP (%) GDP ($ billion)
15
Policy responses* can also shape the downturn and recovery
GDP=gross domestic productNote: Data as of 29 June 2020.Source: ADB COVID-19 Policy Database.
0
4
8
12
16
Central and West Asia East Asia South Asia Southeast Asia The Pacific
% of subregional GDP
Functioning money markets Credit creation Lending to nonfinancial sectorEquity claims on the private sector Direct support to income International assistance (lender/donor)No breakdown
6.0
15.2
10.811.5
7.1
Developing Asia will see its lowest growth since 1961, and recovery of GDP levels in 2021 will not be V-shaped…
GDP growth outlook in developing Asia%
6.1 6.1 6.25.9
5.1
0.1
6.2
6.7 6.6 6.6 6.4
5.6
0.4
6.6
2.2
6.2
2.4
6.7
0.0
1.5
3.0
4.5
6.0
7.5
2015 2016 2017 2018 2019 2020 2021
Developing Asia
Developing Asia excluding NIEs
ADOS
ADO 2020
ADOS
ADO
Forecast
While GDP growth rates will recover in 2021, it will not be enough to fully offset the sharp drop in 2020…
Source: Asian Development Outlook database. 16
…and GDP levels will be below what they would have been without COVID, in 2021 and possibly beyond.
100
110
120
130
140
2015 2016 2017 2018 2019 2020 2021
GDP levels, 2015=100
Developing Asia recovery path
Note: Bubble size indicates the value of 2019 nominal GDP.Source: Asian Development Outlook database.
…and contractions in activity are now expected in most economies.
17
HKG MON
PRCKOR
TAP
AFG
BAN
BHU
IND
MLD
NEP
PAK
SRI
ARM
AZE
GEO
KAZ
KGZ
TAJ
TKM
UZB
BRU
CAM
INO
LAOMAL
MYA
PHI
SIN
THA TIM
VIE
COO
FSM
FIJ
KIR
RMI
NAU
PAL
PNG
SAMSOL
TON
TUV
VAN
-18
-16
-14
-12
-10
-8
-6
-4
-2
0-16 -12 -8 -4 0 4
2020 GDP growth forecast in this Supplement, %
East Asia
South Asia
Central Asia
Southeast Asia
The Pacific
Chan
ge fr
om 2
020
GDP
gro
wth
fore
cast
in A
DOS
Dec
2019
, pe
rcen
tage
poi
nts
p = upgraded forecast, q = downgraded forecast, no sign = unchanged.
Source: Asian Development Outlook database.
Growth forecasts for all economies have been downgraded.
18
2020 2021 2020 2021ADO ADOS ADO ADOS ADO ADOS ADO ADOS
East Asia 2.0 1.3 q 6.5 6.8 p South Asia 4.1 -3.0 q 6.0 4.9 qHong Kong, China -3.3 -6.5 q 3.5 5.1 p Bangladesh 7.8 4.5 q 8.0 7.5 qPeople’s Rep. of China 2.3 1.8 q 7.3 7.4 p India 4.0 -4.0 q 6.2 5.0 qRepublic of Korea 1.3 -1.0 q 2.3 3.5 p Pakistan 2.6 -0.4 q 3.2 2.0 qTaipei,China 1.8 0.8 q 2.5 3.5 p
Central Asia 2.8 -0.5 q 4.2 4.2Southeast Asia 1.0 -2.7 q 4.7 5.2 p Azerbaijan 0.5 -0.1 q 1.5 1.2 qIndonesia 2.5 -1.0 q 5.0 5.3 p Kazakhstan 1.8 -1.2 q 3.6 3.4 qMalaysia 0.5 -4.0 q 5.5 6.5 pPhilippines 2.0 -3.8 q 6.5 6.5 The Pacific -0.3 -4.3 q 2.7 1.6 qSingapore 0.2 -6.0 q 2.0 3.2 p Fiji -4.9 -15.0 q 3.0 -0.7 qThailand -4.8 -6.5 q 2.5 3.5 p Papua New Guinea 0.8 -1.5 q 2.8 2.9 pViet Nam 4.8 4.1 q 6.8 6.8
Developing Asia 2.2 0.1 q 6.2 6.2 Excluding NIEs 2.4 0.4 q 6.7 6.6 q
Since the market turmoil in early March, exchange rates and capital flows have recovered…
Exchange rate movement in the PRC and Southeast Asia
Exchange rates have not depreciated by much…
Source: Bloomberg (accessed 15 July 2020).19
Portfolio flows to Emerging Asia
Notes: 7-day and 28-day moving average of the total portfolio flows. Total portfolio flows is the sum of emerging Asia debt, emerging Asia equity and Malaysia portfolio. Emerging Asia debt data includes Indonesia, India and Thailand. Emerging Asia equity includes PRC, Indonesia, India, Republic of Korea, Thailand, Philippines, Viet Nam, Taipei,China, Sri Lanka, Pakistan.Source: Institute of International Finance (www.IIF.com).
…and portfolio flows to the region have stabilized.
85
95
105
115
125
1/1/2020
1/15/2020
1/29/2020
2/12/2020
2/26/2020
3/11/2020
3/25/2020
4/8/2020
4/22/2020
5/6/2020
5/20/2020
6/3/2020
6/17/2020
7/1/2020
7/15/2020
1 Jan 2020 = 100
Indonesia Malaysia Phil ippines PRC Singapore Thailand Viet Nam
-6
-4
-2
0
2
1/1/2020
1/13/2020
1/25/2020
2/6/2020
2/18/2020
3/1/2020
3/13/2020
3/25/2020
4/6/2020
4/18/2020
4/30/2020
5/12/2020
5/24/2020
6/5/2020
6/17/2020
6/29/2020
7/11/2020
$ billion
7-day moving average 28-day moving average
…as have equity and bond markets.
Equity market indexes in the PRC and Southeast Asia
Many equities have recovered well from their lows…
Notes: JCI = Jakarta Stock Exchange Composite Index; KLCI = Kuala Lumpur Composite Index; PSEi = Philippine Stock Exchange Index; SET = Stock Exchange of Thailand Index; SHCOMP = Shanghai Stock Exchange Composite Index; STI = Singapore Strait Times Index; and VNINDEX = Vietnam Ho Chi Minh Stock Index. Source: Bloomberg (accessed 15 July 2020). 20
JP Morgan EMBI stripped spreads in the PRC and Southeast Asia
Notes: IND=India; INO=Indonesia; PHI=Philippines; PRC=People’s Republic of China; MAL=Malaysia; VIE=Viet Nam. The stripped spread is the yield on sovereign dollar-denominated bonds relative to comparable US Treasuries, and stripped of any collateral effect and other potential enhancements.Source: Bloomberg (accessed 15 July 2020).
…and bond spreads in the region have narrowed since March.
50
75
100
125
1/1/2020
1/15/2020
1/29/2020
2/12/2020
2/26/2020
3/11/2020
3/25/2020
4/8/2020
4/22/2020
5/6/2020
5/20/2020
6/3/2020
6/17/2020
7/1/2020
7/15/2020
1 Jan 2020 = 100
JCI KLCI PSEi SHCOMP SET STI VNINDEX
0
100
200
300
400
500
1/1/2020
1/15/2020
1/29/2020
2/12/2020
2/26/2020
3/11/2020
3/25/2020
4/8/2020
4/22/2020
5/6/2020
5/20/2020
6/3/2020
6/17/2020
7/1/2020
7/15/2020
basis points
IND INO PHI PRC MAL VIE
Asia’s trade has stagnated since the US-China war…
Source: CPB Netherlands Bureau for Economic Policy Analysis' World Trade Monitor21
Developing Asia's Trade, 2000-2020
…with implications for global value chains.
Changes in GVC Participation Ratios over Time, 2000-2018
Lao PDR=Lao People's Democratic Republic, PRC=People's Republic of ChinaSource: ADB estimates; and Asian Development Bank Multiregional Input-Output Tables 2000 and 2018
22
-0.4
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
Taipei,China
Viet Nam Fij
i
Bhutan
Mongolia
Republic of K
oreaJapan
Cambodia
Hong Kong, China
Maldives
Brunei Darussa
lam
Lao PDR
Singap
ore
Bangla
deshIndia
Thailand
Philippines
Pakistan PRC
Kyrgyz Republic
Nepal
Indonesia
Sri La
nka
Kazakhsta
n
Malaysia
Chan
ges i
n Pa
rtic
patio
n Ra
tio
Backward Participation Forward Participation Total Participation
23
But developing Asia will still drive global growth post-COVID.
Source: Asian Development Outlook database; World Economic Outlook database, April 2020.
4.8
2.53.0
4.35.4
4.95.5 5.6
3.0
-0.1
5.44.3
3.5 3.5 3.6 3.5 3.4 3.9 3.62.9
-4.9
5.4
-6
-4
-2
0
2
4
6
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Percentage points
Developing Asia United States Euro areaJapan Latin America and the Caribbean Middle East and North AfricaSub-Saharan Africa Rest of the world
Contributions to global growth
Abdul AbiadDirector, Macroeconomic Research, ADB
June 2020
24
SUPPLEMENTLockdown, Loosening, and Asia’s Growth Prospects
25
Sectoral indebtedness (% of GDP)
305%($187 tn)
322%($255 tn)
387%($158 tn)
383%($184 tn)
168%($28 tn)
220%($71 tn)
198%($18 tn)
265%($57 tn)
0
100
200
300
400
500
2009 2019 2009 2019 2009 2019 2009 2019
World Advanced economies Emerging marketeconomies
Developing Asia
Household debt Nonfinancial corporates Financial corporates Government
GDP=gross domestic product; tn = trillionNotes: Percentages refer to totals across sectors by economy grouping, which is based on Institute of International Finance definitions. Developing Asia is a subset of Emerging market economies and is comprised of Hong Kong, China; India; Indonesia; Republic of Korea; Malaysia; Pakistan; People’s Republic of China; Philippines; Singapore; and Thailand. Numbers in parentheses refer to total debt levels.Source: Institute of International Finance Global Debt Database (accessed 12 June 2020).
Debt had already been on the rise in the decade preceding COVID-19…
26
GDP=gross domestic product; HKG=Hong Kong, China; IND=India; INO=Indonesia; KOR=Republic of Korea; MAL=Malaysia; PAK=Pakistan; PHI=Philippines; PRC=People’s Republic of China; SIN=Singapore; THA=Thailand; tn = trillionNotes: Percentages refer to totals across sectors. Numbers in parentheses refer to total debt levels.Source: Institute of International Finance Global Debt Database (accessed 12 June 2020).
370%($0.8 tn)
519%($1.9 tn)
137%($1.8 tn)
129%($3.6 tn)
65%($0.4 tn)
79%($0.9 tn)
276%($2.9 tn)
330%($5.2 tn)
202%($0.4 tn)
221%($0.8 tn)
65%($0.1 tn)
94%($0.3 tn)
93%($0.2 tn)
99%($0.4 tn)
209%($10.6 tn)
300%($41.5 tn)
428%($0.9 tn)
480%($1.8 tn)
162%($0.5 tn)
188%($1.0 tn)
0
100
200
300
400
500
600
2009 2019 2009 2019 2009 2019 2009 2019 2009 2019 2009 2019 2009 2019 2009 2019 2009 2019 2009 2019
HKG IND INO KOR MAL PAK PHI PRC SIN THA
Household debt Nonfinancial corporates Financial corporates Government
…with wide variation across developing Asian economies and sectors.
Sectoral indebtedness (% of GDP)
Most countries are moving from balanced budgets and low debt to sizeable deficits and higher debt.
27
Notes: Projections are from Baseline Scenario. Comprises a panel of 40 ADB DMCs.Source: ADB calculations using Asia Debt Monitor (ADM) Database based on World Economic Outlook (WEO) October 2019, WEO April 2020 and AsianDevelopment Outlook (ADO) Supplement – June 2020.
0%
25%
50%
75%
100%
125%
150%
-50% -40% -30% -20% -10% 0% 10% 20% 30%
Publ
ic D
ebt (
% o
f GDP
)
Fiscal Balance (% of GDP)
20192021
Public Debt and Fiscal Balance
2019: 2 DMCs2021: 1 DMCs
2019: 12 DMCs2021: 17 DMCs
2019: 17 DMCs2021: 20 DMCs
2019: 9 DMCs2021: 2 DMCs