Message from Secretary General_April 2021
Posted on 19 May 2021
COVID-19 RAGES ON …
COVID-19 deaths passed 3 million in April 2021, a message headlined all over the world. Amid the grim news, there lies hope that vaccination of the masses will create herd immunity that will lead towards more economic activities and earlier economic recovery. Recovery is never in doubt; it is a matter of when.
COVID-19 & VACCINATION IN ASEAN-6
As at 20 April 2021, Vietnam and Singapore have brought down their daily infection rates to a very low level and are slowly opening up their borders.
On the other hand, Indonesia has 1.6 million cases but the daily rate of infection is on a downward trend from a record peak of 14,500 cases a day. Malaysia, Philippines and Thailand are in the midst of the third wave of infections, as they try to balance between health and economy, in their effort to control the pandemic.
All ASEAN-6 countries have started vaccinating the population, with earliest being Singapore in Dec 2020 and last two being Philippines and Vietnam in Mar 2021.
So far, Singapore leads in vaccination efforts, with 14.9% of the 5.7 million population fully vaccinated. Their target is to complete the exercise by Oct 2021.
Indonesia has vaccinated 6.2 million people, the largest number of people in the region. The government hopes to vaccinate 70% of the 270 million people by March 2021.
In the meantime, the other countries have just started their vaccination rollout and most are targeting to inoculate the bulk of their population (70-80%) by Q1 2021, an ambitious target according to experts.
While vaccination is generally seen as the only way to achieve herd immunity, there are still concerns about the effectiveness and risks of vaccines amid the perception that trials of the vaccines have been rushed through.
IMF GLOBAL FORECAST
In its April 2021 forecast, the IMF is expecting a “stronger” global recovery in 2021, with the world GDP expanding 6%, to be followed by 4.4% growth in 2022.
On the other hand, the IMF expects the five largest developing economies in Southeast Asia to collectively grow by 4.9% in 2021, down from its previous projection of 5.2%. These five are Indonesia, Malaysia, the Philippines, Thailand and Vietnam.
For the largest economy in ASEAN, the 2021 GDP forecast for Indonesia has been slightly downgraded by IMF to 4.5% due to restrictions as a result of rising infections and the slow vaccination rollout.
The IMF maintained its 2021 GDP forecast for Malaysia at 6.5%, driven by strong recovery in the manufacturing and construction sectors, and the impact of the vaccination rollout in February.
IMF has revised its 2021 projection upwards for the Philippines to 6.9% (fastest in ASEAN-6), reflecting the “stronger-than-expected growth” in Q4 2020. The increased fiscal stimulus in the 2021 budget is expected to also help boost economic activities. Philippines GDP is also expected to expand further by 6.5% in 2022.
Thailand’s 2021 GDP is expected to grow 2.6% according to IMF, a slight downgrade from previous forecast, given the second wave of COVID-19 infections hitting the country during Q1 2021. Thailand’s economy is highly reliant on tourism, which has been badly battered by the pandemic.
Vietnam’s economy is forecasted to grow at 6.5% in 2021, higher than the global average of 6 percent, as it overcomes the impacts of the pandemic, according IMF. Vietnam’s growth is expected to achieve the highest growth rate among the ASEAN-6 countries at 7.2% in 2022.
However, the various forecasts are subject to uncertainty, arising from the recent spikes in COVID-19 infections (e.g. Indonesia, Philippines and Malaysia), slower-than-expected vaccination rollout, geopolitical and trade tensions, and potential volatility in global financial markets.
Wear A Mask. Keep Your Distance. Stay Safe.
YEOH WEE JIN