Illustrative image (Photo: VNA) Singapore (VNA) - The recovery prospectslook brightest for Vietnam and the country is expected to be the only SoutheastAsiaeconomy to record positive growth this year, according to the latestGlobal Economic Outlook report from Oxford Economics, commissioned by charteredaccountancy body ICAEW.
The report said that overall, it expects SoutheastAsia's GDP growth to contract by 4.2 percent in 2020. It added that the rebound in economic activity over the coming quarters in theregion remains uncertain, particularly in the fourth quarter of 2020.
Specifically, economies which have convincinglycontained the COVID-19 outbreak such as Thailand and Vietnam will see a strongerrecovery than Indonesia and the Philippines, which are battling new waves of infections after restrictions were prematurely relaxed.
The report noted that both Indonesia and thePhilippines remain highly vulnerable as they have weaker public healthinfrastructure, lower levels of fiscal support available, and are much moreconsumer driven than others in the region.
The pace of recovery in Indonesia is expected to beslow and household income will be squeezed. GDP is expected to contract 2.7percent in 2020 before a 6.2 percent expansion in 2021. The Philippines is setto record the largest contraction in Southeast Asia, with its GDP falling 8.2percent in 2020, because of its dependence on international tourism and a slowexit from lockdown.
Malaysia’sexports meanwhile are predicted to benefit from improving Chinese import demandand the electronics cycle. Nonetheless, the speed of its recovery will likelyslow given the current sluggish global demand, high unemployment and weakinvestment, and its economy is forecast to shrink by 6 percent this year,followed by a growth of 6.6 percent in 2021.
Mark Billington, ICAEW regional director for Southeast Asia, said that the road to economic recovery in SoutheastAsia will be long due to the tensions between the US and China, a long-termslowdown in global trade activity, and the potential of a prolonged COVID-19pandemic./.
VNA
