Connect with us

Hi, what are you looking for?

Economy

APEC sees new waves of infection threatening projected 2021 rebound

THE STRONG economic rebound expected by the Asia-Pacific Economic Cooperation (APEC) bloc this year is facing downward pressure due to the rising case counts in many countries, APEC said in a report.

In its Regional Trends Analysis paper released Thursday, APEC’s Policy Support Unit raised its gross domestic product (GDP) forecast for the region to 6.3% from the 5.7% estimate it issued in February, with economic activity expected to pick up.

“The near-term economic outlook points to higher APEC GDP growth this year, with the expected strong increase in domestic and global activity, as pent-up demand is unleashed following a year of subdued spending due largely to COVID-19 (coronavirus disease 2019) related movement restrictions,” it said.

The development of COVID-19 vaccines also generated optimism, it said, supporting expectations that economic recovery will be more sustainable.

The region’s GDP contracted 1.9% last year.

Economic growth beyond 2021, however, is expected to slow to 4.4% in 2022 and further to 3.4% in 2023, APEC’s policy unit said.

Denis Hew, the unit’s director, said much uncertainty clouds the region’s outlook as many economies experienced renewed spikes in new infections and are still struggling to contain the spread of the virus.

“There’s a downside risk. We are cautiously optimistic. We are expecting a strong recovery this year but at the same time, we know that in many economies, there’s been a resurgence of these cases that led to partial or economy-wide types of lockdowns. That’s something we need to watch out for,” Mr. Hew said in a briefing Thursday.

“This kind of situation will lead to a lot more uncertainty, will lead to less investment activity and that could have an impact on the economic recovery. The only way to contain the pandemic is to get as many people as possible vaccinated,” he added.

APEC has 21 members: the Philippines, Australia, Brunei, Canada, Chile. China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Russia, Singapore, Chinese Taipei, Thailand, the United States and Vietnam.

The Philippines is among those experiencing a fresh surge in COVID-19 cases starting March, which prompted the government to raise the quarantine setting in Metro Manila and nearby provinces to curb the spread and prevent the health systems from collapsing. New cases have declined since then and lockdowns were eased in mid-May.

The report laid out a near-term outlook for the region with a scenario of governments continuing with their fiscal support to buoy a recovery, and central banks complement this action with monetary policy accommodation.

APEC’s public support unit said setbacks in production and investment, reduced jobs and wages as well as the expected unwinding of fiscal stimulus packages will slow growth in 2022-2023.

“Scaled-down fiscal support is projected as governments balance between reining in the fiscal deficit incurred to counter the pandemic shock in 2020 and redirecting support toward the hardest-hit but employment-generating firms,” it said.

The pace of economic recovery will vary across the region because of unequal access to vaccines and the pace at which economies can roll out their inoculation programs. It said the majority of APEC economies can only achieve her immunity by mid-2022 while others might do so by year’s end.

“The weakness in investment, which is projected to extend to 2021, could also affect growth. Greenfield investments are expected to remain at reduced levels as elevated uncertainty prevents investors from committing capital for new projects,” it added.

To sustain recovery, it said APEC members should continue its efforts in containing the pandemic through testing, contact tracing, isolation and treatment while herd immunity is not yet achieved. Government support will still play a key role in recovery while public health expenditures should remain a priority to boost health systems.

Meanwhile, inflation is expected to average at two percent this year, up from 1.5% in 2020. APEC said the rate is still manageable, giving enough room for monetary policy to remain accommodative. — Beatrice M. Laforga

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

LONDON — Anyone can be a banker these days, you just need the right code.   Global brands from Mercedes and Amazon to IKEA and...

Economy

AllDay Supermarket has tapped PayMaya to power its self-checkout counters with cutting-edge technology to elevate customers’ grocery shopping experience. A first for the Philippine retail industry, AllDay Supermarket...

Economy

INFLATION in the first eight months stood at 4.4%, quicker than the central bank’s 4.1% average inflation forecast for 2021. — PHILIPPINE STAR/ MICHAEL...

Economy

By Kyle Aristophere T. Atienza, Reporter PHILIPPINE President Rodrigo R. Duterte’s political allies — at least those who are running for the country’s top...

Economy

The Balagtas Station of the Philippine National Railway Clark Phase 1 Project is currently under construction. Photo taken on June 14. — PHILIPPINE STAR/...

Economy

A SENIOR economist at the Asian Development Bank (ADB) said a local bourse’s program for micro, small, and medium enterprises (MSME) is key to...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

US President Joseph R. Biden, Jr., will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!