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COVID-19 Set to Dampen Asean and China’s Economic Growth

The SARS outbreak provides a useful benchmark, but there are significant differences between that epidemic and the latest one.

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Coronavirus Asia

The ongoing coronavirus outbreak will dampen economic growth in China this year, but the scale of the impact remains uncertain and will depend on the duration and intensity of the health crisis, says Fitch Ratings.

Huge uncertainties remain over the impact of the coronavirus on China’s economy. We believe it is still too early to make definitive adjustments to our GDP forecasts at this stage and instead have examined some illustrative scenarios.

The SARS outbreak provides a useful benchmark, but there are significant differences between that epidemic and the latest one.

Notably, the novel coronavirus (2019-nCoV) has spread faster than SARS, and official travel and workplace activity restrictions have been more aggressive.

These factors suggest that the impact of the current outbreak on economic activity on a daily basis may be more intense than SARS, but the impact on GDP will also depend on the length of time taken to contain the virus.

https://www.fitchratings.com/site/pr/10109959

The novel coronavirus (Covid-19) will cause damage worth US$2.4-3.4 billion to Southeast Asian nations, the Kasikorn Research Center estimated.

The impact would result from the Covid-related economic slowdown of China that had close ties with the Association of Southeast Asian Nations (ASEAN) in terms of trade, investment and tourism, the center reported.

If Covid-19 outbreak is contained in 6 months, the Chinese economic growth may be at 4.7% this year, 1.0% lower than earlier expected. That would cut the ASEAN economic value by US$2.4-3.4 billion equivalent to 0.07-0.11% of ASEAN’s yearly gross domestic product. Damage in Thailand would be moderate at US$500-700 million or 0.09-0.13% of its annual GDP, the research center wrote.

Economics

Asia’s slow rate of vaccination is a thorn in the region’s economic recovery

Southeast Asia has been hit badly. Daily infections for Indonesia, Thailand, Vietnam are at their worst, on a seven-day moving average. The Philippines and Malaysia are not far off their daily infection peaks reached in the second quarter of 2021.

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Last week was tough for the Asia-Pacific region. Many countries responded to stubbornly elevated daily infections by extending or tightening social distancing measures.

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Economics

World Bank lowers Thai GDP growth outlook to 2.2%

In the Thailand Economic Monitor released today, the World Bank adjusted its outlook on Thailand’s economic growth this year to just 2.2% from its previous forecast of 3.4%.

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BANGKOK, July 15, 2021 – Thailand’s economy continues to take a heavy toll due to the COVID-19 pandemic and is projected to expand modestly at 2.2 percent in 2021, revised down from the 3.4 percent growth projected in March, according to the World Bank’s latest Thailand Economic Monitor “The Road to Recovery” published today.

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