The economies in this Asia Pacific group, according to Moody’s, are mostly high-income, with mature institutions, robust healthcare facilities, and active labour markets.
NEW DELHI — As the global economy strengthens and pandemic containment measures are gradually relaxed, Moody’s Investors Service forecasts that Asia Pacific’s growth will return to 6.7 percent in 2021, up from 0.8 percent in 2020.
The Asia Pacific economy’s overall resilience, however, hides a variety of output losses and indicates growing dispersion throughout the region, according to the report. By 2022 or 2023, over 30% of Asia Pacific economies will have had robust post-pandemic growth and will have returned to pre-crisis GDP levels.
The economies in this group, according to Moody‘s, are mostly high-income, with mature institutions, robust healthcare facilities, and active labour markets.
Over 40% of the economies in the area will experience output losses of more than 8% of pre-pandemic GDP projected levels. The majority of the economies in this category have lower-middle incomes, and severe scarring will almost certainly result in increased social risks.
High debt burdens are restricting governments’ fiscal space to respond to the pandemic in several of these nations.
Deep scarring will very certainly increase social risks in a number of economies, particularly in lower-income nations, where the pandemic has worsened pre-existing inequality tendencies because to its disproportionate impact on employment.
By 2022, income per capita in a few economies will still be lower than in 2019, while in others it will only be slightly higher.
Labour and income constitute a very negative risk for India, Indonesia, Sri Lanka, and Bangladesh, according to Moody’s released ESG scores, and will have consequences for other sectors. “Notably for India, logistical challenges reaching a large rural population have complicated the vaccine rollout. The government is also constrained in its ability to provide support to the economy and population, by a high debt burden and weak debt affordability.”
Overall, Asia Pacific is expected to expand quicker this year and next than other areas such as the Middle East, North Africa, and Latin America, according to Moody’s.
Pertinently, COVID-19 has expedited a number of secular trends like as automation and trade regionalisation, which Moody’s believes might have long-term implications for social risks and investment reallocation between nations.