The ICISA INSIDER | July 2020
Covid-19: Asia-Pacific leads Global Recovery from Pandemic By Rajiv Biswas, APAC Chief Economist, IHS Markit
Summary The Asia-Pacific (APAC) region has been badly hit by the impact of the Covid-19 pandemic during H1 2020, with lockdown measures and travel bans in many Asian economies having triggered sharp contractions in GDP growth. The pandemic and associated lockdowns have disrupted industrial production and consumer spending in many Asian economies, with the tourism industry in the Asia-Pacific having collapsed since March 2020. However, with the number of new Covid-19 cases slowing to very low levels in many APAC economies during May, domestic lockdown measures are being eased in a growing number of nations. Recent Purchasing Manager Index indicators for June 2020 have already rebounded significantly in mainland China. The latest PMI indexes across the Asia-Pacific region also signaling a significant rebound in domestic demand in some other APAC economies, including Japan, Australia, Malaysia and Thailand. Improving APAC economic growth momentum is expected in H2 2020, as domestic demand gradually recovers from lockdowns while export orders from key markets in Europe and North America also improve. By 2021, with the pandemic expected to be contained, a stronger economic rebound in expected in the APAC region, led by buoyant growth in China.
China leads APAC economic recovery As the Covid-19 pandemic escalated in China during the first quarter of 2020, it created severe disruptions of industrial production due to the strict lockdown imposed on industries and households. The normal annual shutdown of China’s industrial production during the Chinese New Year holiday period which occurred in late January was followed by a national lockdown that extended until mid-February.
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