"India imposed strict lockdown measures to contain the spread of the pandemic and this has had a severe impact on economic activity", Asian Development Bank Chief Economist Yasuyuki Sawada said.
In contrast, India, which is one of the hardest hit countries in the world with over 4.8 million infections despite lengthy lockdowns, is expected to shrivel by nine percent in 2020 before expanding by eight percent next year.
2020 Update projects a deeper decline in the Philippines' economy than ADB's June forecast of 3.8% contraction, with subdued private consumption and investment expected for the rest of the year and uncertainties about the global economic recovery.
In FY2021-22, ADB expects the economy to revive to grow at 8%. This will still leave next year's output below pre-COVID-19 projections, suggesting an "L"-shaped rather than a "V"-shaped recovery".
About three-quarters of the area's economies are anticipated to publish adverse development in 2020.
The revision comes on the back of S&P Ratings and Nomura changing their forecasts to a sharper contraction of 9% for India's economy in the current financial year as against their earlier expectations. "Consistent and coordinated steps to address the pandemic, with policy priorities focusing on protecting lives and livelihoods of people who are already most vulnerable, and ensuring the safe return to work and restart of business activities, will continue to be crucial to ensure the region's eventual recovery is inclusive and sustainable".
Policy support packages announced to the end of August had reached a total of $3.6 trillion - about 15 percent of regional GDP, the bank said. "Worsening geopolitical tensions are another risk".
Sub-regions of developing Asia are expected to post negative growth this year except for East Asia which is forecast to expand by 1.3 per cent and recover strongly to 7 per cent in 2021.
China, where the virus first emerged late past year before morphing into a pandemic that has infected more than 29 million people worldwide, was one of the few economies to buck the downward trend in the region. Forecasts recommend that nearly all of creating Asia will recuperate subsequent 12 months, aside from some economies within the Pacific.
Tourism-dependent island economies, in particular, have seen wrenching economic contractions.
Depressed demand and lower oil prices allowed the ADB to keep its inflation forecast for developing Asia at 2.9%, and it is predicted to slow further to 2.3% in 2021.
Inflation is expected to moderate to 5.5 percent and current account deficit is likely to narrow to 1.1 percent of GDP in FY 2021.
The replace to ADO 2020 incorporates a theme chapter "Wellness in Worrying Times" which discusses the significance of wellness as communities recuperate from Covid-19's toll on bodily and psychological well being.