Asia-Pacific Expected To Return To Growth Of 6.9% In 2021
S&P has estimated that the Asia-Pacific region’s lost output over 2020 and 2021 will near $3 trillion as a result of the COVID-19 pandemic and its impact on the economy. While the Asia-Pacific’s economy is projected to contract by 1.3%, it is forecast to grow by 6.9% in 2021.
“Asia-Pacific has shown some success in containing COVID-19 and, by and large, responded with effective macroeconomic policies,” said Shaun Roache, chief economist for Asia-Pacific at S&P Global Ratings. “This can help cushion the blow and provide a bridge to the recovery. The recovery looks set to be weighed down by indebted balance sheets, however.”
In Australia, S&P expects GDP to decline by 4% in 2020, due to unemployment levels, which are set to average 7.5% for the year.
“Australia has flattened the COVID-19 curve and the subsequent re-opening has led to a sharp bounce in consumer activity off depressed levels. However, the labour market is still deteriorating and much will depend on how many jobs quickly return,” S&P stated.
Korea is expected to fare well over the next two years. “Korea has managed COVID-19 exceptionally well up to now and the economy’s large technology industry is also helping to weather the storm,” Roache said.
China, meanwhile, is forecast to grow by 1.2% and 7.4% in 2020 and 2021, respectively.