While Asia's economic contraction will be worse than expected this year, China is leading the way in post COVID-19 recovery.

According to the International Monetary Fund, Asia's economy will contract 2.2% in 2020, a decrease from the IMF's previous economic forecast in June.

In contrast, the IMF upgraded China's growth forecast to 1.9% for the year because of a "faster-than-expected" recovery in the second quarter, reports the South China Morning Post.

China's economic recovery continued into the third quarter, growing by 4.9%.

Even though Asia will see its worst drop in economic performance in generations this year, IMF economist Jonathan Ostry says the regional growth projection is still higher than the world's trend rate of growth.

"Asia entered this crisis before anybody else. And as a result, it's emerging thanks to its very effective response. On the whole, it's emerging from this crisis earlier than other folks. So, for example, in China, which entered the crisis first, there have been two quarters already of a very strong growth," Ostry said.

"The Chinese economy is bigger than it was before the pandemic, which is not something we see everywhere. It is positive growth in a sea of negatives."

With more than 41 million confirmed COVID-19 cases, countries around the world are still battling the pandemic and health experts are concerned over resurgences in some regions.

"So there's a lot of lessons. I think we can already learn from China. The first is a vigorous health policy response that has been effective. The second is a very substantive, credible fiscal and monetary stimulus," Ostry said.

"And the fact that China has been in a position to do well on the export side because it was well positioned to produce and export the very types of goods that are in huge demand in the global economy in this crisis. Medical equipment, PPE, home electronics and the like."

The next few months could prove critical in fighting COVID-19 and economic decline. 

The IMF says economic activity should start to normalize in badly hit areas next year but overall, recovery will stay below pre-COVID-19 levels. 
 

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