Connect with us

Economics

IMF: Everything you need to know about Asia’s ‘multispeed’ recovery

Our latest Regional Economic Outlook shows that a recovery started in the third quarter, but growth engines are not all firing with the same power across countries, leading to a multispeed recovery.

Avatar

Published

on

economics asia recovery rebound Coronavirus china virus health healthcare who world health organization imf international monetary fund

Despite some signs of rapid growth in some parts of Asia-Pacific, not all countries are bouncing back at the same speed.

Loading...

This is ‘multispeed’ recovery is outlined in the IMF’s latest Regional Economic Outlook.
The IMF warns it could lead to increased inequality and indebtedness across the region.

The Asia-Pacific region is recovering from its worst recession in living memory. Our latest Regional Economic Outlook shows that a recovery started in the third quarter, but growth engines are not all firing with the same power across countries, leading to a multispeed recovery.

To enable structural change, Asia’s economic policies should be focused on the world of tomorrow, not yesterday.

Reflecting worse-than-expected outturns in the second quarter in a few countries, the IMF’s forecast for the region has been downgraded to -2.2 percent in 2020—the worst outcome for this region in living memory. India’s economy experienced a much sharper than expected contraction in the second quarter—24 percent on a year-over-year basis—and is expected to recover slowly in the coming quarters.

China, which suffered the pandemic’s blow earlier than other countries, has seen a strong recovery after the first quarter lockdown, and growth has been revised up to 1.9 percent this year, a rare positive figure in a sea of negatives. Advanced economies (Australia, Korea, Japan and New Zealand), while still in recession, are expected to do somewhat better than expected in 2020, reflecting a faster pickup in activity following earlier exit from lockdowns.

Drawn-out recovery

The good news is that we expect the region to grow by 6.9 percent in 2021. But even with this boost, output will be lower at the end of 2021 than our pre-pandemic projection. The scars will be deep: with declining labor force participation and weak confidence dimming private investment, potential output by the middle of the decade could be some 5 percent lower than before the pandemic.

Lessons and challenges

The Asia-Pacific region went into this crisis first and many of its economies are emerging from it first as well. What lessons can the world learn from this experience?

First, an early public health response, when infection rates were still low, was an essential steppingstone to flattening the virus curve. Second, relaxing containment measures only after the virus has been suppressed—and with appropriate post-lockdown policies (such as testing and contact-tracing) in place—is associated with better economic outcomes. On both counts, Asia has done well in comparison to other regions, probably due to its experience from previous pandemics. Third, fiscal support has also been critical to reduce economic costs and underpin the recovery. Here Asia has pulled its weight with significant policy stimulus.

How the recession affects Asia’s various economies.

Risks ahead

Prospects for a global trade-led recovery look dim, because of weak global growth, closed borders, and festering tensions around trade, technology, and security—despite the boost to the region from China’s recovery. Diversifying Asia’s economies away from over-reliance on exports is a work in progress: a fundamental reorientation toward domestic demand will take time and presents an exceptionally difficult challenge for the smallest economies (such as the Pacific islands) and more generally, those reliant on tourism.

Comments

Economics

The Future of Asia: greener but with a public and private debt hangover

The COVID-19 pandemic has been a perfect storm, destroying jobs, worsening poverty and inequality, and creating a public and private debt problem—especially for countries and firms already in fragile financial health beforehand

Avatar

Published

on

The Sydney Opera resumed live performances and the city of Melbourne recently hosted the Australian Open tennis tournament with fans (mostly) in attendance.

Loading...
(more…)

Continue Reading

Economics

50:50 campaign may not get immediate extension

National News Bureau of Thailand

Published

on

logomain

Loading...

BANGKOK (NNT) – The government’s 50:50 co-pay campaign expiring on 31st March may not be getting an immediate campaign extension. The Minister of Finance says campaign evaluation is needed to improve future campaigns.

The Minister of Finance Arkhom Termpittayapaisith today announced the government may not be able to reach a conclusion on the extension of the 50:50 co-pay campaign in time for the current 31st March campaign end date, as evaluations are needed to better improve the campaign.

Originally introduced last year, the 50:50 campaign is a financial aid campaign for people impacted by the COVID-19 pandemic, in which the government subsidizes up to half the price of purchases at participating stores, with a daily cap on the subsidy amount of 150 baht, and a 3,500 baht per person subsidy limit over the entire campaign.

The campaign has already been extended once, with the current end date set for 31st March.

The Finance Minister said that payout campaigns for the general public are still valid in this period, allowing time for the 50:50 campaign to be assessed, and to address reports of fraud at some participating stores.

The Fiscal Police Office Director General and the Ministry of Finance Spokesperson Kulaya Tantitemit, said today that a bigger quota could be offered in Phase 3 of the 50:50 campaign beyond the 15 million people enrolled in the first two phases, while existing participants will need to confirm their identity if they want to participate in Phase 3, without the need to fill out the registration form.

Mrs Kulaya said the campaign will still be funded by emergency loan credit allocated for pandemic compensation, which still has about 200 billion baht available as of today.

Source link

Continue Reading

Economics

Customs Department Considers Measures to Help SMEs

National News Bureau of Thailand

Published

on

logomain

BANGKOK (NNT) – The Customs Department is seeking ways to reduce the impact of the exemption on import tax and value-added tax (VAT) for imported goods worth up to 1,500 baht, as such measures are hurting small and medium-sized enterprises (SMEs).

Loading...
(more…)

Continue Reading

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 13,956 other subscribers

Latest

Trending