recovery – Page 5 – COOPER GENERAL NEWS

Snow falls as people wearing face masks walk through the Asakusa district on March 29, 2020 in Tokyo, Japan.

Tomohiro Ohsumi | Getty Images

SINGAPORE – Towards the end of 2020, many investors are viewing Asia as the region with one of the best economic prospects for the next year as the coronavirus outbreak can be relatively better controlled.

However, a recent surge in Covid cases in some countries threatens to dampen the region’s economic outlook, some analysts have warned.

“For some of the Asian giants, this year’s problems with Covid-19 are unlikely to get better when the clock strikes 12 noon on New Year’s Eve,” said research firm Pantheon Macroeconomics.

However, many parts of Asia – where the virus first appeared – remain lower than in Europe and the US, data from Johns Hopkins University showed.

For some of the Asian giants, this year’s Covid-19 problems are unlikely to get better when the clock strikes 12 noon on New Year’s Eve.

But some countries are now struggling with a far worse resurgence than they did earlier in the pandemic. Even areas that have made great strides in containing the virus may not be spared. Taiwan this week reports its first locally transmitted case since April 12 – underscoring the difficulty in eradicating Covid.

Here’s a look at the Asian economies grappling with a renewed spike in coronavirus infections and how that would affect their economic prospects.

Japan

Covid-19 balance sheet: 207,007 cumulative confirmed cases and 2,941 deaths as of Wednesday, according to Hopkins data.

The number of daily reported coronavirus infections in Japan rose again in November and topped 3,000 for the first time last week, Hopkins data showed.

According to Reuters, medical groups in the country warned the pandemic will put a significant strain on the health system. However, Japanese Prime Minister Yoshihide Suga has failed to declare a state of national emergency – although he said he was suspending a travel subsidy program to slow the spread of the coronavirus, the news agency reported.

Economists at Pantheon Macroeconomics wrote in a Wednesday report that the Japanese government’s “relatively soft” rules on social distancing don’t appear to be working and that this could lead to tougher measures in the coming months.

“Therefore, a second and more effective nationwide state of emergency in Japan early next year cannot be ruled out,” the economists said. That would weigh on Japan’s economy in the first quarter of 2021, they added.

South Korea

Covid-19 Record: According to Hopkins, there were 53,533 cumulative confirmed cases and 756 deaths on Wednesday.

As in Japan, the daily incidence in South Korea reached unprecedented levels this month – above 1,000 for the first time since the outbreak.

But unlike in Japan, the government in South Korea has taken a tougher stance in response to the new wave of Covid cases.

The government on Tuesday announced a nationwide ban on gathering five or more people and ordered the closure of tourist attractions such as ski slopes and other winter sports facilities, Yonhap news agency reported.

This move, according to Pantheon Macroeconomics, would allow most of South Korea’s economic damage to be contained, for the most part, in the fourth quarter of this year.

Malaysia

Covid-19 balance sheet: 98,737 cumulative confirmed cases and 444 deaths on Wednesday, according to Hopkins data.

The Southeast Asian country kept Covid cases to a minimum before the recent surge from October, Hopkins data showed. This prompted the government to impose a new round of partial closure measures in some parts of the country.

Economists with consulting firm Capital Economics said the outlook for the Malaysian economy had become “less optimistic” this quarter, particularly in the area of consumer spending.

“A second wave of the virus and the reintroduction of many restrictions on movement have reversed the sharp recovery in home consumption in the third quarter. Google’s high-frequency mobility data suggests social distancing continues to weigh on activity,” a report said Tuesday.

But the other parts of the economy – like exports – should continue to perform strongly, so the macroeconomic success of the recent resurgence is likely to be “much less” than the previous wave, the economists said.

Workers make protective masks at a factory in Handan, Hebei Province, China on Jan. 22, 2020.

China Daily about REUTERS

BEIJING – Chinese leaders warned at a key economic planning meeting last week that growth was still facing many challenges.

While the rest of the world is still grappling with the shock of the coronavirus pandemic, China will be the only major economy expanding this year.

President Xi Jinping, Prime Minister Li Keqiang, and other heads of state and government who attended the Central Economic Work Conference from December 16-18, commented positively on China’s relative achievements and remained cautious of major changes in economic policy, according to state media. The annual meeting sets development priorities for the coming year.

The meeting indicated that while the country recognizes achievements, it needs to be clearly aware of the changes caused by the pandemic and uncertainties abroad, state media said.

“The foundation of our economic recovery is not yet solid,” the report said in a CNBC translation of the Chinese text.

Covid-19 first appeared in the Chinese city of Wuhan late last year. To control the outbreak, Chinese authorities temporarily closed more than half of the country earlier this year. GDP declined 6.8% in the first quarter before returning to growth at 3.2% in the second quarter.

“Not having a solid (foundation) yet indicates a slightly slower than expected start to domestic demand and consumption,” Bruce Pang, director of macro and strategy research at China Renaissance, said in a Chinese statement, according to a CNBC translation.

Investment in manufacturing and the non-government stake have not rebounded much, Pang said. He added there were doubts about the sustainability of exports, uncertainties about employment and many other concerns.

Economists have suggested that much of China’s recovery can be attributed to traditional growth drivers such as exports, fueled by overseas demand for pandemic-related products.

However, many Chinese have yet to increase their spending as they have concerns about future income. This lack of consumption affects an economy that Beijing seeks to support with domestic demand rather than foreign demand.

While China expects growth of around 2% this year, retail sales were down 4.8% year over year by the end of November.

“Next year the pace of economic growth could slow down from an initial rapid pace,” the state media said, according to a CNBC translation of the Chinese text. “Keeping the economy within reasonable limits remains an important test.”

GDP expansion in the first few months of next year would look high compared to the decline in the first quarter of 2020. Overall, many economists predict that China’s GDP will grow by around 8% next year.

Pang pointed out that the rate would represent a 5% growth in 2020 and a further 5% increase in 2021.

That’s slower than the 6.1% pace in 2019.