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IMF Logo is seen at the International Montary Fund (IMF) headquarters in Washington, United States on April 24, 2017.Samuel Corum | Anadolu Agency | Getty Images

Asia's economy is expected to shrink this year "for the first time in living memory," the International Monetary Fund said, warning that the region could take several years to recover.


The fund said in a blog post published Tuesday that Asia's economy will likely contract by 1.6% this year — a downgrade from its previous forecast of no growth in April.

The region is still in a better shape compared to other parts of the world, but a weaker global economy has made it difficult for Asia to grow, Changyong Rhee, director of the Asia and Pacific department at IMF, told CNBC's "Squawk Box Asia" on Wednesday.

He said "Asia cannot be an exception" when the whole world is suffering from the effects of the coronavirus pandemic. The IMF last month slashed its forecasts for the global economy. It projects the world economy could shrink by 4.9% this year before rebounding to grow by 5.4% next year.

What we are worried about Asia is actually the recovery from 2020.Changyong RheeInternational Monetary Fund

Asia was the first region to be hit by the coronavirus disease — or Covid-19 — which first emerged in the Chinese city of Wuhan. After the virus spread globally, many governments imposed measures that restrict people's interactions and movements, which severely reduced economic activity.

Rhee said Asia's economy is expected to rebound strongly to register a 6.6% growth next year. But the level of economic activity in the region would still be lower than what IMF had projected before the pandemic, he added.   

"What we are worried about Asia is actually the recovery from 2020," said Rhee.

He explained that countries in the region have a "heavy dependence" on trade, tourism and remittances — segments of the global economy that were hit hard by the pandemic.

"Even if we develop new medical solutions, the recovery of ... contact-intensive sectors will be slow, tourism for example. So because of that, I think Asia's recovery will be protracted," he said.

And if there is a second wave of infections in the region, many governments may not have the firepower to support their economies like they did during the first wave, Rhee added.

That's especially true for the region's emerging economies, which have "relatively limited" policy space to respond to a resurgence of cases, he explained.

"So I wonder, if the second wave happens, whether the Asian governments can use the same stimulus as in the ... first crisis," he said. "So we have to be more concerned, more cautious."

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Phytoplankton populations in the Arctic have INCREASED 57% over the last two decades, driven by melting sea ice and new sources of nutrients swept into the region by shifting ocean currents

Decades of receding sea ice in the Arctic have brought about an unexpected increase in the region's phytoplankton population.

In a new paper, researchers from Stanford's School of Earth, Energy & Environmental Sciences found that Arctic phytoplankton populations increased 57% between 1998 and 2018.

The team claim their findings mark a 'significant regime change' for the region that will help absorb carbon dioxide from the rapidly warming region.

Researchers from Stanford found that phytoplankton populations in the Arctic had increased 57% between 1998 and 2018

'We knew the Arctic had increased production in the last few years, but it seemed possible the system was just recycling the same store of nutrients,' Stanford's Kevin Arrigo told Stanford News.

'Our study shows that’s not the case. Phytoplankton are absorbing more carbon year after year as new nutrients come into this ocean. That was unexpected, and it has big ecological impacts.'

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Phytoplankton are the base food source in the Arctic, feeding small fish and crustaceans, as well zooplankton, all of which in turn feed larger animals like sharks, baleen whales, and even coral.

Phytoplankton also play an important role in absorbing carbon dioxide from the atmosphere, using it to produce sugar that becomes available food source for other sea animals.

Using a sensitive mix of satellite data and sensor readings from research ships in the Arctic to measure the net primary production, or NPP, to get a sense of the phytoplankton population in the region.

The increases were driven in part by melting sea ice, which increased the territory that phytoplankton could grow in, but also a steady supply of nutrients swept into the region from other oceans

The team estimated phytoplankton populations by analyzing satellite data between 1998 and 2018 as well as data captured by Arctic research ships from that period

NPP is used to measure the speed that phytoplankton and other algae and sea life convert sunlight and carbon dioxide into usable sugar.

'The rates are really important in terms of how much food there is for the rest of the ecosystem,' Arrigo said.

'It’s also important because this is one of the main ways that CO2 is pulled out of the atmosphere and into the ocean.'

Initially the team thought the rising NPP in the Arctic was tied to the rate of sea ice melting, but they found NPP increases were unaffected by a 2009 slowdown in sea ice melt.

Phytoplankton is the foundation of the Arctic food chain, synthesizing sunlight and carbon dioxide into sugars that feed zooplankton and other small fish, which in turn feed larger animals like sharks and whales

While the change limited the amount of new space phytoplankton could expand into, the team found they instead seemed to grow into denser blooms, which they suggest was possible because shifting ocean currents gave them access to additional nutrient sources from areas outside the Arctic. 

Despite the unexpected discovery, the team cautions against presuming that more carbon dioxide absorption from booming phytoplankton populations will be enough to offset the Arctic's stunningly quick climate transformation.

'It’s taking in a lot more carbon than it used to take in, but it’s not something we’re going to be able to rely on to help us out of our climate problem,' Arrigo said.

Read more:
  • ‘Regime shift’ happening in the Arctic Ocean | Stanford News

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