However, despite a year having passed since the declaration of a COVID-19 pandemic. The international community faces extreme tensions at the socio-economic level. While the human losses continue to grow and millions of people are unemployed.
Despite everything, it is very remarkable that the way out of this health and economic crisis is getting closer and closer. That is why the growth prospects are very positive in many parts of the world, and the Asian continent is no exception.
Why was the economy stimulated despite the pandemic?
Throughout 2020 and so far in 2021, the stimulation of the economy is attributed to the ingenuity of the scientific community. They managed to develop vaccines in a very short time to counteract this virus that affects the entire world. Millions of people have already been vaccinated, and billions more are expected to be vaccinated in a very short time.
Additionally, the world’s economies are adapting to new ways of working remotely. This allows many production processes to run their course despite the restrictions imposed by the pandemic. This has generated a vigorous reactivation of the economy in many regions, earlier than expected.
This positive outlook is supported by upward revisions in the more advanced economies. In the case of North America, growth for 2021 is expected to be 6.4 percent. This indicates that the economy of the United States of America will be the only one that projects that its GDP will exceed the forecasts established for 2022 despite the occurrence of the pandemic.
Other economies, such as the Euro zone, also registered a significant rebound this year but at a slightly slower pace. One of the emerging and clearly developing economies is the Asian economy, which projects growth of 8.4 percent this year. Although the Asian giant, China, in 2020 had already resumed its GDP level prior to COVID-19, the other Asian countries will achieve it in the period between 2021 and 2022.
The impact of the Chinese economy on the Asian continent
The Chinese economy will have a growth of 73 percent by 2021. This is a value above the average and that will tend to stabilize during the following years. During 2020, the Asian giant suffered a strong industrial, service, retail sales and investment contraction.
All product of the outbreak of the virus in Wuhan, stalling the sustained growth that had been bringing in previous years. But the control of the virus through developed vaccines has accelerated the reactivation of the economy of many Asian countries, and China is no exception.
In India, the restrictions imposed to contain the virus counterbalance the benefits achieved with tax cuts and reforms in the financial area. This affected the Indian economy in 2020 stalling it at 4 percent, but for 2021 the estimate is 6.2 percent.
In general, the Southeast Asian economy will benefit greatly from the drop in global demand in 2021. These economies will have very important growth because they are closely related to the Chinese economy. With the control of the coronavirus, tourism can be activated to a great extent in the second half of the year, achieving positive data of 2.7% by the end of 2021.South Asia will recover 6% in 2021, while Central Asia will grow only 2.8% as it is affected by the fall in the prices of oil and raw materials.
What must be done to maintain recovery?
Policy-makers should sustain economic recovery, gradually shifting income support to growth-promoting policies. In the long term, emerging markets and developing economies such as those in Asia must focus on improving health and education services.
In addition to promoting the development of digital infrastructure, climate resilience, the improvement of business practices. This will mitigate the damage caused by the pandemic, reduce poverty and promote shared prosperity.
Affecting the Southeast Asian stock markets in view of these prospects, As a result of the positive forecasts that are estimated for 2021 in the Asian continent, the Southeast Asian stock markets closed higher on April 28, 2021. The Singapore stock market increased 5.13 points and its Straits Times composite indicator was 3,219.56 units.
The Malaysian stock market, the Kuala Lumpur square, rose 1.82 points and the selective KLCI ended at 1,608.50 units. The Indonesian stock market, the Jakarta Park, rose 14.86 integers and its JCI index closed at 5,974.48 units.
The Thai stock market, the Bangkok stock market rose 17.56 points and its SET index closed with 1,576.79 units. The Philippine stock market grew 112.67 integers and its PSEi composite index closed at 6,469.14 points.
In the Vietnam Stock Exchange, the VN index of the Ho Chi Minh stock closed at 1,229.55 units, due to a rebound of 9.80 integers. All closed higher, as a result of the excellent forecasts for 2021.
