MOST countries in the Asia-Pacific region are expected to regain their lost output by 2021, but the Philippines is an exception as the country still grapples to craft a concrete plan on vaccine procurement and fiscal stimulus remains relatively minute, an international think tank said.
In its most recent assessment of the region’s economic dynamics, Moody’s Analytics said the Philippines will be the last country in the Asia Pacific to regain its GDP growth level to pre-Covid levels.
The think tank’s growth projection of the country’s economy is a 9.9-percent contraction in 2020, 4.5-percent growth for this year and a 6.2-percent growth in 2022. This is in contrast to the government’s expectation that local economic growth is expected to reach 6.5 percent to 7.5 percent this year.
According to Moody’s Analytics’ forecasts, the Philippines is expected to regain its momentum by the fourth quarter of 2022. This is in contrast to most of the countries in the region regaining strength this year.
In particular, Moody’s Analytics data show that China, Taiwan and Vietnam led the recovery as they have already recovered in 2020. Hong Kong is next in line with its recovery slated for the first quarter of this year.
South Korea, Indonesia and Australia will regain pre-Covid growth levels by the second quarter of this year, to be followed by Thailand by the third quarter of this year.
Singapore, New Zealand, Malaysia and Japan are expected to bounce back in the fourth quarter of this year, while India is expected to return to its prepandemic strength by the first quarter of 2022.
“The region is working to obtain sufficient vaccine supplies. While behind North America and Europe, most of the larger Asia-Pacific countries have secured enough doses at this point to vaccinate roughly 75 percent of their populations. An important exception is the Philippines, which has made little progress so far,” Moody’s Analytics said.
While Moody’s Analytics lauded the country’s monetary policy response along with other countries in the region, it also cited the fiscal stimulus as an integral reason behind their forecast.
“Fiscal policy is also supportive and should remain so in the coming year. Malaysia, Singapore, Australia, Japan and Thailand stand out in terms of the amount of fiscal stimulus…. Japan has approved an additional US$708 billion stimulus speeding plan for 2021…. Singapore and Malaysia are expected to continue fiscal support, and Indonesia’s central bank is committed to provide interest-free funds to the government for targeted fiscal spending at least through mid-2021,” Moody’s Analytics said.
“India and the Philippines are the least committed to fiscal stimulus, even though they were the two most hard-hit economies from Covid-19 and their subsequent lengthy and strict quarantine policies,” it added.