Thailand
Bumpy recovery for S-E Asia before strong rebound in late 2021
KUALA LUMPUR: Prolonged lockdowns and social distancing measures are forecast to cap global gross domestic product (GDP) growth this year, making it unlikely that a return to pre-Covid-19 economic growth and trade activity to take place before late 2021.
In South-East Asia, growth would likely be constrained by social distancing measures but restrictions would continue to be eased next year, especially in economies that are able to roll out vaccines relatively quickly, the Institute of Chartered Accountants in England and Wales (ICAEW) said.
“While uncertainties remain and most economies will take time to recoup lost output, risks have become more balanced with recent positive news on vaccines and regional growth prospects for South-East Asia in the medium to long term are optimistic, ” it said in a statement.
To recap, the latest economic outlook report from Oxford Economics, commissioned by ICAEW, predicted that GDP across South-East Asia will contract by 4.1% in 2020 before a sharp rebound to 6.2% in 2021.
The chartered accountancy body said the economic outlook report found that an economic rebound in 2021 remained contingent on the easing of lockdown restrictions, global recovery momentum and the successful rollout of coronavirus vaccines.
As such, progress on vaccination will be an important barometer for growth in 2021, with services likely to catch up faster in economies that are better placed with regards to vaccine procurement and distribution.
The Malaysian economy, it said, had experienced a V-shape recovery early on but the extension and widening of areas under the conditional movement control order (CMCO) to contain the rise in Covid-19 infections would put a strain on economic activity in the short term, leading to a double-dip in recovery.
“However, the government has announced a highly expansionary budget for 2021, with an increased focus on infrastructure investment. This will support a solid rebound in economic growth to 6.2% next year, after a 5.6% contraction this year.”
In Indonesia, the pace of recovery is still uncertain, driven primarily by weak mobility trends, a double-digit slip in imports and weakening momentum in retail sales.
The pandemic is expected to leave permanent scars on GDP levels, and it is forecast to contract by 2.2% this year before rebounding to 6% in 2021, with the help of consumer spending and infrastructure, said ICAEW.
Countries which have been successful in controlling the pandemic like Vietnam and Singapore have led the region in recovery, it said.
“Indeed, Vietnam is predicted to be the only economy to record positive growth this year at 2.3%. Thailand also had early success in stemming the tide of Covid-19 infections. However, travel restrictions have hit its economy hard as travel and tourism account for 20% of its GDP.” — Bernama
Source: https://www.thestar.com.my/business/business-news/2020/12/24/bumpy-recovery-for-s-e-asia-before-strong-rebound-in-late-2021