Publication: World Bank East Asia and Pacific Economic Update, October 2021: Long COVID
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2021-09-27
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2021-09-24
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The East Asia and Pacific (EAP) region is suffering a reversal of fortune. In 2020, many EAP countries successfully contained COVID-19 and economic activity swiftly revived as other regions struggled with the pandemic and economic recession. Now the region is being hit hard by the COVID-19 Delta variant while many advanced economies are on the path to economic recovery. The disease is damaging the economy and is unlikely to disappear in the foreseeable future. In the near term, the persistence of the pandemic will prolong human and economic distress unless individuals and firms can adapt. In the longer term, COVID-19 will reduce growth and increase inequality unless the scars are remedied and the opportunities grasped. Policy action must help economic agents to adjust today and make choices that avert deceleration and disparity tomorrow.
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“World Bank. 2021. World Bank East Asia and Pacific Economic Update, October 2021: Long COVID. © World Bank. http://hdl.handle.net/10986/36295 License: CC BY 3.0 IGO.”
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Publication World Bank East Asia and Pacific Economic Update, April 2021(Washington, DC: World Bank, 2021-03-25)A year after the first case was confirmed in Wuhan COVID-19 is proving hard to suppress even, while the emergence of more transmissible variants of the variant poses new challenges to the containment of the disease globally. The economies of the region began to bounce back in the second half of 2020. However, only China and Vietnam have followed a V-shape recovery path with output surpassing pre-COVID-19 levels. Most of the other countries have not seen a full-fledged recovery in terms of either output or growth momentum. Economic performance across countries continues to depend on (i) the efficiency with which the virus is contained; (ii) the ability to take advantage of the revival in international goods trade; and (iii) the capacity of governments to provide fiscal and monetary support. China and Vietnam are expected to enjoy strong growth in 2021, whereas other economies in the region will grow more gradually. Many economies, especially in the Pacific islands are not expected to reach pre-COVID-19 levels of output until 2022 or later. 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The region’s growth prospects face intensified downside risks, including further escalation of trade disputes, a sharper-than-expected slowdown in China, the United States and the Euro Area, along with a disorderly Brexit, and an abrupt change in global financing conditions. In some countries, rising indebtedness and other vulnerabilities, such as the constrained capacity for foreign debt rollover, could amplify the negative effects of external shocks. The regional growth moderation underscores the need to address key vulnerabilities and preserve economic dynamism among developing East Asia and Pacific economies. In the short run, countries with sufficient policy space should use available policy tools to stimulate domestic activities. Better quality spending, together with prudent debt management, is needed to safeguard fiscal sustainability. Deepening regional integration would help offset the negative impact of global protectionism. In the medium to long term, pursuing structural reforms that raise competitiveness, support trade and investment, and encourage innovation is critical to boosting productivity and growth.Publication World Bank East Asia and Pacific Economic Update, April 2018(Washington, DC: World Bank, 2018-04-11)Developing EAP grew slightly faster than anticipated in 2017. The growth of regional GDP excluding China is forecast to remain stable in 2018, while China's GDP growth is expected to moderate as the economy keeps rebalancing. Major downside risks include volatility associated with faster than expected monetary policy tightening in advanced economies and a rising threat of trade restrictions. Developing EAP countries would need to get ready to respond to increasing interest rates and find ways to raise potential growth in the medium run. 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The intensification of risks underscores the need to continue to enhance economic security and promote economic mobility by: expanding and strengthening social assistance and insurance programs; investing in prenatal and early childhood development; and reducing gaps in educational access and quality for disadvantaged groups and in lagging areas.Publication World Bank East Asia and Pacific Economic Update, October 2017(Washington, DC: World Bank, 2017-10-03)The economic outlook for the developing EAP region remains positive, and will benefit from an improved external environment as well as strong domestic demand. The growth of regional GDP excluding China is forecast to accelerate in 2018, while China's GDP growth is expected to decline in 2018 and 2019, although remain higher than most countries in the region. Poverty is projected to continue its long-term decline. Major downside risks include financial sector vulnerabilities, large fiscal imbalances, and the possible escalation of geopolitical tensions. The improved outlook for global growth provides a window of opportunity for developing EAP to continue to reduce key vulnerabilities and strengthen the foundations for sustained and inclusive growth in the medium term. The region could also benefit from further developing tourism sectors and deepening of regional integration, to offset the emerging global protectionism. And policies to ensure inclusive growth should involve ensuring economic mobility and security for all, going beyond the primary focus on reducing poverty.
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