EXPORT-oriented economies in South-east Asia could take longer to recover from the coronavirus-led slowdown, compared with those with lower exposure to the impact of the global recession, a report from Morgan Stanley suggests.

This means that economies like Thailand, Malaysia and Singapore may have to wait until the first quarter of 2021 to recover, the American investment bank said in a report released on Monday. It said some in this group have implemented lockdowns, leading to a double hit on exports and domestic demand.

Ahead of this group however, are countries like the Philippines and Indonesia, even though the institutional response to contain the virus has trailed in these economies.

“Lower exposure to global recession impact and relatively high structural growth is why we expect them to return to pre-Covid-19 levels next after China,” the report said.

However, if the drag from Covid-19 lingers for a longer time, the recovery for this group could be hindered behind the East Asian economies of Korea and Taiwan, which have seen moderate success in containing the virus.

As for the rest of Asia, excluding Japan, China is likely to be the first to return to pre-Covid-19 levels of economic growth by the third quarter of 2020, it said.

The bank based this analysis on three factors: how exposed each economy is to the global recession, the institutional response to handle the Covid-19 situation and the ramifications on domestic demand, and the room and willingness to undertake policy easing.

It also assumes that daily Covid-19 cases will peak sometime in Q2, with a gradual reopening of the economies. This would imply that Q2 likely marks the worst quarter for most parts of the region.

However, the bank is expecting a gradual rather than V-shaped recovery, likely in the second half of this year.

This is because the need to continue safe-distancing measures, as long as a vaccine is not found, will likely constrain the pace of recovery. The bank’s US biotech analyst Matt Harrison has estimated that a vaccine seems unlikely until spring 2021 at the earliest.