Illustrative photo. (Source: VNA)Singapore (VNA) – A gradual U-shaped recovery is expected for the ASEAN+3 region, which includes ten ASEAN member states, China, Japan and the Republic of Korea, according to an updated forecast by ASEAN+3 Macroeconomic Research Office (AMRO).
Regional growth is expected to slow sharply this year to zero percent, from 4.8 percent in 2019, before rebounding strongly to 6.0 percent in 2021, AMRO said in a statement.
Nine of the 14 ASEAN+3 members are expected to contract this year, while economies projected to record positive growth rates are China and smaller ASEAN economies – Brunei, Laos, Myanmar and Vietnam.
Strict containment measures to prevent the coronavirus from spreading have caused economies to come to a standstill, leading to massive increases in unemployment, disruptions to businesses, and widespread collapse in domestic demand.
Additionally, bans on international travel have decimated the region's all-important tourism sector.
AMRO said the resurgence in infections in some parts of the region had heightened caution about another spate of lockdowns, which the ASEAN+3 economies can ill-afford, even though most still have some fiscal and monetary space to provide support if needed.
Li Lian Ong, AMRO group head and lead specialist for financial surveillance and acting group head for regional surveillance, said the biggest challenge facing the regional policymakers in the second half of 2020 would be balancing the trade-off between easing restrictions to revive their economies and risking another wave of infections.
AMRO said its growth trajectory was predicated on the effective containment of the COVID-19, both regionally and globally./.
VNA
