Growth in APAC ex-China is expected to be relatively subdued in 2021, according to Oxford Economics
New outbreaks of Covid-19 are weighing on APAC’s economic recovery, according to Oxford Economics. The impact of outbreaks is relatively large because of generally low vaccination rates, combined with low tolerance to the virus in several places.
China and Singapore have seen large increases in vaccinations. But in China’s case, given low tolerance to the virus, even small Covid-19 flare ups have led to stringent local restrictions and dampened confidence.
In many other APAC economies, where less than 20% of the population has been fully vaccinated, recent Covid-19 outbreaks are having a significant impact on behaviour and policy.
Many governments in the region have recently tightened restrictions, leading to delays in recoveries. As a result, growth in APAC ex-China is expected to be relatively subdued in 2021.
Fortunately, APAC economies will eventually be able to vaccinate enough people to raise the level of immunity and become less vulnerable to Covid-19 outbreaks.
Among Asia’s developed economies, the case load is low compared to other nations. But, amid low tolerance for the coronavirus, upsurges in Japan in April, Taiwan in May, and South Korea and Australia more recently have led to renewed anxiety and government restrictions.
Among Asian emerging market economies, following the crisis in India, there have recently been serious flare-ups in Thailand, Indonesia and especially Malaysia.
Meanwhile, China exports improved in June, shrugging off the impact of the temporary Shenzhen port closure and other local supply chain bottlenecks.