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Regional transport to stay resilient in 2021 on recovery, stimulus spending: Moody’s
TRANSPORT operators in Malaysia and Indonesia are among the Asian infrastructure players tipped to benefit from the recovery in the regional infrastructure sector.
The growth will be led by the sea transport industry, which is getting a boost from port throughput volume as the global economy recovers and trade improves.
“Rated port operators were relatively less affected by the pandemic in 2020 and will benefit from an improvement in trade in 2021,” Moody’s Investors Service said.
The new report added: “Furthermore, the coronavirus may accelerate the diversification of global supply chains and more manufacturing may therefore move away from China… However, any shifts that do occur will be a multi-year process.”
Meanwhile, government stimulus is another shot in the arm for infrastructure.
Spending will focus on infrastructure investments such as transportation in 2021, according to Moody’s. Most sectors had stayed resilient in 2020, and could be supported by an economic rebound for growth now.
Key developments in Malaysia include economic corridors in states such as Johor and Kedah, while Indonesia’s latest Budget raised infrastructure spending by nearly 50 per cent year on year, after deep fiscal cuts that put the brakes on projects in 2020.
Public investment in road networks is now set to increase, though the toll road sector will face an uneven recovery depending on the domestic Covid-19 situation, it added.
But airports are expected to continue lagging other transport sectors until international travel resumes on the back of global Covid-19 containment.
For instance, monthly domestic passenger numbers at Malaysia Airports Holdings – which operates KL International Airport and 38 other airports in Malaysia – are around one-tenth of pre-pandemic levels, the report noted.
Easing curbs on inter-state travel will boost domestic traffic, but an improvement in international traffic “will take longer to materialise”, said Moody’s. Visitor arrivals made up about one-half of Malaysia’s passenger traffic in the pre-coronavirus era.
Domestic demand also cushioned the blow in the Indonesian port sector, where operators with a domestic focus had more resilient container traffic than international-oriented counterparts, said Moody’s, citing sensitivity to global conditions.
Source: https://www.businesstimes.com.sg/asean-business/regional-transport-to-stay-resilient-in-2021-on-recovery-stimulus-spending-moodys