Connect with us

Economics

APEC Region’s Economy to Grow by 6% in 2021

The economy of the APEC region is expected to grow by 6 percent in 2021 but the World Bank has slashed Thailand’s gross domestic product (GDP) projection for 2021 to just 1%, from 2.2% originally forecast, due to the impacts of the COVID-19 pandemic.

Published

on

ee5f614c taxi ariport bw square

The economy of the APEC region is expected to grow by 6 percent in 2021 and will settle at 4.9 percent in 2022 in anticipation of the unwinding of fiscal and monetary support measures, says a newly published report on economic trends in the Asia-Pacific.        

According to the latest APEC Regional Trends Analysis (ARTA), the Asia-Pacific expanded by 8 percent during the first half of 2021, following a 3.7 percent contraction in the first half of 2020. However, growth among member economies continues to diverge and uncertainties remain substantial.

Thailand could achieve 1.3% economic growth this year, as forecast by the Fiscal Policy Office (FPO), said Pisit Puapan, director of the Bureau of Macroeconomic Policy.

But the World Bank has slashed Thailand’s gross domestic product (GDP) projection for 2021 to just 1%, from 2.2% originally forecast, due to the impacts of the COVID-19 pandemic.

Growth in the volume and value of merchandise trade accelerated by double-digits in the first half of this year thanks to the combined effect of a low comparison point following a substantial economic contraction a year ago and a rebound in economic activity.

Trade in COVID-19-associated goods such as pharmaceuticals, telecommunications equipment and computers continued to be strong.

Decline in greenfield investments and rising inflation

However, the analysis also saw a steep decline in greenfield investments to the APEC region, plunging to the lowest level in almost 20 years. This is particularly concerning given the crucial role they play in boosting infrastructure development and productivity as well as improving domestic technology and skills.

Another concerning development is rising inflation. The region recorded a higher inflation rate of 2.6 percent in the first nine months of 2021, after averaging 1.5 percent in 2020. The analysis points out the risk of an upward trend in inflation to economic recovery if left unaddressed.

“APEC, along with the global economy, is in uncharted territory, where recovery is underway even amid an ongoing pandemic,” said Dr Denis Hew, Director of the APEC Policy Support Unit, which produced the report.

“There are many hard-earned lessons from the pandemic, central to which is that economic, trade and health policies are intertwined – and that good policies matter.”

Dr Denis Hew, Director of the APEC Policy Support Unit

“Unequal access to vaccines needs to be addressed urgently to avoid a two-track recovery,” Dr Hew added. “APEC economies should also think ahead toward facilitating a gradual and steady economic reopening to revive viable sectors such as travel and tourism, reinvigorate manufacturing industries and herald the emergence of new jobs, markets and businesses that could prove more sustainable as well as profitable.”

Existential threat of climate change

The report also addressed the existential threat of climate change for the region and humanity as a whole, as it will affect APEC economies’ financial systems, supply chains and consumer behavior.

“Addressing climate change is the realm not only of scientists, but of policymakers who can change the incentive structures and the rules,” said Emmanuel San Andres, an analyst at the APEC Policy Support Unit who co-wrote the report.

“Climate change disproportionately impacts vulnerable populations, including the poor and Indigenous peoples, even as they contribute the least to it.”

Emmanuel San Andres, an analyst at the APEC Policy Support Unit

The report noted that even in the best-case scenario, where climate change is kept at or below 2.0°C, APEC can expect GDP losses of up to 11.3 percent by 2050.

 “We need to strengthen global and regional cooperation and emphasize actions, not just commitments on climate change,” San Andres added. “Tackling climate change requires a holistic approach across a range of areas and issues, including ensuring that implementation of green policies addresses its negative side effects.”

The report helps to set the tone for the APEC Ministerial Meeting and the APEC Economic Leaders’ Meeting to be held this week.

A graphical overview of the region’s economic, trade and investment performance by the APEC Policy Support Unit is now available. The APEC in Charts 2021 showcases 17 indicators as well as a section on the COVID-19 pandemic; showing the number of cases and deaths, the vaccination status, and the top five most traded COVID-19-related products in the region.

Click to comment

Leave a Reply

Economics

Thailand’s Ministry of Finance expects 3.5 to 4.5% economic growth in 2022

For next year, the Ministry of Finance is projecting an economic growth of 3.5-4.5% from effective pandemic control measures, incentives, domestic spending, the export sector, private investment support, global economic recovery, and government expenditures.

Published

on

70b43f2f
The Minister of Finance says Thailand’s economy this year would see only a 1.1-1.2% growth

BANGKOK (NNT) – The Ministry of Finance is now projecting an economic rebound to 4.5% growth next year, with government investments serving as key drivers. The Minister of Finance says the government will focus more on inclusive growth next year, with no sectors left behind.

(more…)
Continue Reading

Ecommerce

Pakorn Peetathawatchai, President, The Stock Exchange of Thailand (SET)

Published

on

Pakorn Peetathawatchai, President, The Stock Exchange of Thailand (SET)

What measures has SET taken to support listed companies’ compliance with ESG standards?
PAKORN PEETATHAWATCHAI:

PAKORN: When we first began promoting ESG-compliant investments, we were met with little interest. We attributed this to a lack of clear data to showcase the economic benefits of ESG investment, and perhaps limited clarity as to what constitutes a sustainable or ESG-compliant investment. The launch of the THSI list and, subsequently, the SETTHSI Index, was designed to address this. Our most recent data, comparing returns for the SETTHSI Index with the broader SET and SET100 indices from April 2020 to April 2021, underscores the economic benefits of these investments: the group compliant with ESG standards outperformed the other two indices on every data point. 

As of May 2021 Thailand was home to CG and ESG assets under management totalling BT54.8bn ($1.7bn) across 50 funds – up from 23 funds in 2019. Meanwhile, of the BT187.1bn ($5.9bn) raised in green, social and sustainability bonds since 2018, BT136.4bn ($4.3bn) was raised in 2020 – 83% from the government and the remainder from development banks and private players. This rising demand, in a move to manage risk and generate returns, has been complemented by growing supply and promotion: supply from ESG-compliant businesses aiming for resiliency and sustainable growth, as well as promotion from regulators highlighting investment opportunities with good CG and SD practices. Indeed, the pandemic has been a catalyst in shifting the view of ESG compliance from a luxury to a requirement in the new normal.

In what ways can enhanced standard-setting and regulatory mechanisms overcome the remaining barriers to improved ESG performance?

PAKORN: A multi-stakeholder approach is crucial for enhanced ESG performance – not only in Thailand, but around much of the globe. This can also help to address the standout incumbent challenge: access to reliable, wide-ranging ESG data. For example, the 2020 update to the 56-1 One Report established clear ESG standards and triggered online and offline capacity-building programmes to support listed firms’ compliance. SET is developing an ESG data platform with a structured template to promote the availability of comparable data, maximise value added from corporate sustainability disclosures, and foster collaboration between the business value chain and stakeholders. This is expected to support Thai companies along their ESG journey in an economically sustainable way, result in a greater number of sustainability-focused products and services, drive sustainable investing in the Thai investment community and ultimately “make the capital market work for everyone”, as outlined in the SET’s vision.
 

 

Read More

Continue Reading

Recent

Most Read

Join 14,209 other subscribers