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