The ASEAN-6 economies have experienced a surge in Covid-19 cases since the start of 2021, which has led to the reinstatement of social distancing measures.
Thailand has recorded over 120,000 cases since April against less than 7,000 in all of 2020. At the other end of the spectrum Singapore and Vietnam averaged 5 and 1.1 per million new cases a day in May, which is still very low regionally and globally. In the case
This has dimmed, but not derailed the regional economic recovery; we have lowered our 2021 GDP growth forecast to 4.9% (from 5.5% previously). Our forecast is for growth to improve to 6.5% in 2022 as countries move closer to herd immunity and the recovery becomes more synchronised across sectors.
After being lauded for their successful containment of Covid-19 in 2020, the ASEAN-6 economies have experienced a surge in cases since the start of the year.
New daily cases in Malaysia are currently above the peak reached during the first wave and an infection rate of over 235 cases per million at the time of writing is higher than in India.
But while hospital capacity is becoming stretched, the humanitarian cost has not been as large.
We expect sequential GDP growth to be weaker in Q2 than in Q1 across most economies in the region as tighter restrictions will hit already fragile sectors exposed to social distancing measures or household ‘social spending’. Positively, global trade continues to recover, which is providing some support to the region.
Assuming some restrictions are eased from June, we expect stronger sequential growth in H2. However, given the slow pace of vaccinations, with the exception of Singapore, we expect the recovery will be bumpy, and the risk of further periods of heightened restrictions remains. The rise in uncertainty is also likely to lead to further economic scarring.
Thailand relaxes COVID-19 measures to help revive economy
During the past couple weeks, new infection cases have been down from roughly 20,000 daily cases to 17,000 -19,000. Moreover, the number of daily discharges is exceeding infections, which has led to the conclusion that the situation is improving.
Thailand relaxed more virus related social curbs on September 1st, in dozens of cities including Bangkok, in a move that may indicate that the country’s economy, hit hard by COVID-19 will soon revive, lead by the export sector and sound financial fundamentals.(more…)
Southeast Asia to relinquish its lead over Latin America says Moody’s
While the emerging economies of Southeast Asia have outperformed their counterparts in Latin America for most of the past two decades, their lead will slide in the next few quarters as Southeast Asian governments clamp down to fight the pandemic’s lingering second and third waves.
The Delta surge is casting larger clouds over the global recovery and emerging markets are in the thick of it. Despite the ebbing of the coronavirus variant in India, where it first emerged, its spread in Southeast Asia, Africa, and the Middle East has steepened the road to recovery in these regions.(more…)
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