Latest coronavirus: Asian economies show resilience despite epidemics, Deutsche Bank says
Asia-Pacific economies expected to withstand persistent outbreaks of Covid-19, due to limited lockdowns and increased export demand from US and EU, Deutsche report says Bank released Monday.
Although many countries in the region experience relatively high daily Covid-19 infections and vaccination rates are generally still low compared to developed markets, the bank noted their economies were still less affected than last year. .
“Many of the current foreclosures are very targeted and localized,” said Deutsche Bank researchers, led by Jason Liu, Asia-Pacific head of the bank’s investment office.
“Most of the emerging countries in Asia are export oriented and are therefore ready to take advantage of further recoveries in external demand,” they added.
The Deutsche Bank team said its gross domestic product forecast for China remained at 8.7% for this year and 5.5% in 2022. “We believe the Chinese economy will remain supported by growth exports and improved consumption. “
China’s GDP growth was 12.7% year-on-year in the first half of the year.
“We have seen an uneven recovery in different sectors of the economy,” the bank wrote. “Consumption growth has lagged behind expectations recently. Some Chinese cities experienced a few outbreaks in June, which affected the month’s consumption. “
Deutsche Bank noted that India is recovering from a severe second wave of Covid-19.
Daily new cases fell below 40,000 – a three-month low from a 10-fold high last month. “Recent closures have been shorter, localized and less stringent,” the bank noted.
But while the pace of vaccinations has picked up recently, only about 10 percent of India’s eligible population has so far been fully vaccinated.
For Southeast Asia, Liu and his team said the key to economic recovery will be vaccination rates. Only Singapore has been able to immunize its population at a rate comparable to that of developing countries.
Indonesia and Malaysia vaccinated about 13% and 24% with at least one dose, respectively.
Deutsche Bank said the region could no longer rely on exports of personal protective equipment. “The demand for PPE will be less pronounced as global economies slowly return to normal.”
However, there would be continued demand for “electronics, software equipment and semiconductors, as American and European consumers in particular will start to spend their accumulated savings,” Deutsche Bank said.