Indonesia and Malaysia weigh on Asian growth, India and China lead expansion, say economists

• Jul 14, 2021

Asia’s economic recovery may be the driving force in a resurgence in global growth this year, led by China and a revitalised India. Moody’s Analytics is forecasting a rebound of 5.5 percent in real gross domestic product (GDP) following the historic 3.7 percent contraction in 2020. However, another wave of Coronavirus, and ongoing lockdowns, may threaten economic expansion.

“The Coronavirus wave is raging in parts of Southeast Asia, with Indonesia and Malaysia seeing an unprecedented surge in daily infections,” Moody’s said. “Indonesia began July with a record-high 24,836 new daily infections. The spike since late June came after the Muslim Eid al-Fitr holiday, which saw mass movement of migrant workers. Malaysia trails Indonesia’s number, but daily new infections continue to exceed 6,000. In both cases, this development takes the wind out of the expectation that these recoveries will gather steam into 2022,” said Moody’s, warning that domestic demand will suffer until infections are under control.

Global immunisation is the key to getting the pandemic under control. A total of 3.44 billion doses of the various vaccines have been administered worldwide, according to the Bloomberg Global Vaccine Tracker, enough to fully immunise 22.4 percent of the world’s population.

Cambodia has vaccinated nearly 5 million people – around half of those targeted to be inoculated against Covid-19. However, the World Health Organization (WHO) local representative has warned of the risk of another spike in cases, building on nearly 62,000 infections and more than 900 deaths in the Kingdom.

“Cambodia is headed toward large-scale community transmission and overwhelmed hospital critical-care capacity unless all individual and social measures are being implemented urgently, responsibly and effectively now,” Dr Li Ailan of WHO wrote on Twitter. “Sadly, the virus is widely circulating and more lives will be lost,” she added.

However, Li says she is optimistic about the pace of immunisation in the Kingdom, saying she was looking forward to the milestone of 5 million people receiving their first dose of the vaccine.

Moody’s says Asian countries that are able to reopen their borders and stimulate domestic demand by letting local businesses open their doors again, will outperform their rivals this year.

“Countries that must continue to enforce strict social distancing, partial lockdowns and sealed borders will struggle if they must maintain accommodative monetary policy and fiscal support while developed economies around the world, as well as Asian economies that are able to open their domestic economies, expand in an environment of policy normalisation,” Moody’s said.

Cambodia’s economy will grow 4 percent this year and 5.5 percent next year, according to Asian Development Bank forecasts released in April.

GDP contracted by 3.1 percent last year.

Source: https://www.khmertimeskh.com/50893363/indonesia-and-malaysia-weigh-on-asian-growth-india-and-china-lead-expansion-say-economists/