October 28, 2021 House of Trust

Regional Economic Recovery in 2021?

*Image Source: AFP Photo/Roslan Rahman

The year 2020 has been an unprecedented year on the global stage. With coronavirus cases reaching almost 100 million causing the deaths of over 2.14 million global inhabitants to date, our 21st century world is suffering from its worst pandemic in 100 years. As a result, we experienced the Great Lockdown in 2020, which is considered the worst economic recession since the Great Depression. In fact, several countries including Malaysia are still under lockdown in January 2021, which dampens the economic rebound projected for 2021. Similar to the Great Depression, both advanced economies and emerging market and developing economies are both now in recession.

Although the worst-case scenario projects slowing global growth among western major economies in 2021, emerging markets on the other hand are projected to lead the global economic recovery. Likewise, ASEAN and Asia Pacific markets are spearheading the drive towards economic growth. Baseline economic outlook called for growth across the entire APAC (Asia Pacific) region in 2021, with the fastest growth projected in China, Vietnam and Hong Kong.

In 2020, many Asian countries successfully contained the disease used a combinationof stringent mobility restrictions, extensive testing-based strategies, and information programs to encourage precautionary behaviour (World Bank, 2020). However, several regional economies including Malaysia, Indonesia, Japan and India are still discovering local clusters that illustrate remaining risk in 2021 within the region, as shown in Diagram 1.

Source: World Health Organisation
Diagram 1: Asian Countries displaying a darker shade of blue shows a higher number of Covid-19 cases in the last 7 days.


In addition, economic growth in 2021 will to a certain extent depend on 2020’s economic performance. Countries like Vietnam and China who have contained the pandemic will continue to thrive and grow even more in 2021 as seen in Diagram 2, while other countries, especially those open economies which are dependent on western markets have a bleak economic outlook in the beginning of 2021.

Diagram 2: 2020 Economic Growth of Selected Developing Countries in East Asia


However, the entire APAC region would not fully recover until an extended rebound of the global economy expands the range of global trade to include more consumer goods such as automobiles and commodities such as crude oil and petrochemicals. Besides that, the effectiveness of the RCEP agreement implementation will go a long way in attracting a larger share of global value chains (GVCs) and deepen the specialization of each RCEP member, as shown in Diagram 3.

Source: (Global Times, 2020)
Diagram 3: RCEP enhances regional supply chains.


In addition to that, economic recovery in the APAC region would not be complete until international travel and tourism flourish once again, especially in the ASEAN region which is well-known for attracting western tourists. Also, the resilience and recoveries in several industries and communities depend largely on the willingness of governments to continue to provide targeted fiscal support to households and industries hurt by the pandemic.

Finally, a key to regional economic recovery towards pre-pandemic levels is the effectiveness and availability of coronavirus vaccines. Realistically, wide deployment of vaccines would take time, delaying the restoration of confidence and optimism in the economy, as shown in Text Box 1:




*Benedict Weerasena is an Economist at Bait Al Amanah (House of Trust)

Related Posts

Malaysia needs extraordinary foreign policy

August 23, 2021

August 23, 2021

*This article by Abdul Razak Ahmad, Ph.D was also published in Free Malaysia Today The president of the American Council...

22 Achievements of Johor State Government

February 5, 2018

February 5, 2018

22 Achievements of Johor State Government Under the Leadership of YAB Datuk Seri Mohamed Khaled Nordin, Chief Minister of Johor...

Ucapan Belanjawan 2019

November 7, 2018

November 7, 2018

Post Views: 738

SEED Community: Kehadiran ke Parlimen Adalah Amanah dan Tanggungjawab Rakyat

September 23, 2021

September 23, 2021

Kami, selaku kumpulan masyarakat madani yang menandatangani kenyataan ini, memandang serius kegagalan forum untuk dipenuhi ketika sesi sebelah petang persidangan...

MASA UNTUK MENGEMBALIKAN DEMOKRASI DAN TADBIR URUS YANG BAIK

July 29, 2021

July 29, 2021

Versi Bahasa Malaysia Seluruh negara kini menyaksikan tipu muslihat ahli eksekutif Parlimen yang membingungkan mengenai pembatalan Ordinan Darurat dengan penuh...

5 Perkara Anda Perlu Tahu Tentang Bajet Johor 2018

November 24, 2017

November 24, 2017

5 Perkara Anda Perlu Tahu Tentang Bajet Johor 2018 Post Views: 754

Economic Outlook 2019

December 19, 2018

December 19, 2018

The Fiscal and Economics Division of the Ministry of Finance Malaysia recently released the Economic Outlook 2019. Here are a...

Weekly Economic Update (Week 3 of January 2020)

January 22, 2020

January 22, 2020

I. Retrenchment & Downsizing in 2020 Malaysia’s unemployment rate could rise from 3.3% to between 3.4% and 3.6% in 2020...

Parliament Should Reconvene Immediately To Table The 12th Malaysia Plan

March 10, 2021

March 10, 2021

Photo by CEphoto, Uwe Aranas Wednesday, 10 March 2021: The CME-BAA Macroeconomic Observatory (MEO), a joint platform promoted by the...

Parti Politik Membentuk Kerajaan Baharu Perlu Jamin Penambahbaikan Parlimen untuk Elak Krisis Baru

August 16, 2021

August 16, 2021

*Kredit Gambar: Unsplash Kami selaku kumpulan masyarakat madani yang menandatangani kenyataan ini, mengikuti dengan rapat ucapan Tan Sri Muhyiddin Yassin...

International Affairs Update (Week 1 of January 2020)

January 8, 2020

January 8, 2020

A. Singapore i) Digital Tax Singapore started imposing GST on overseas digital services at the current standard rate of 7%,...

Adakah Pengundi Kita Terlalu Beremosi?

December 10, 2019

December 10, 2019

Ada banyak aspek yang boleh diperhalusi dalam menilai sikap dan pemikiran pengundi. Kajian serta disiplin yang mengkaji sentimen serta tingkah...

Senarai Kabinet Malaysia 2020

March 9, 2020

March 9, 2020

Menteri Kanan – Menteri Perdagangan Antarabangsa dan Industri YB Dato’ Seri Mohamed Azmin AliTimbalan Menteri: Datuk Lim Ban Hong (akan...

Special Committee on the Economy of the Future

January 16, 2018

January 16, 2018

Our world’s economy is experiencing such a great transformation, especially in terms of the rapid digitalization of the economy. Many...

Keluarga Malaysia: Ke Mana Kita Mahu Pergi?

October 1, 2021

October 1, 2021

Oleh Mohd Daud Mat Din (Pengarah Pengasas Bait Al-Amanah) dan Prof. Madya Dr. Mohd Izani Mohd Zain (Fakulti Ekologi Manusia,...

Comments
Leave a Reply

Your email address will not be published. Required fields are marked *