Southeast Asia, the world’s most vibrant economic region until COVID-19 struck, has completely reversed its growth pattern. After years of spectacular growth rates, the individual economies of Southeast Asian nations are contracting”•with tourism and trade slumping due to restricted global travel and reduced consumption.
The Asian Development Bank last year saw the Philippine economy shrinking 8.5 percent last year (it actually contracted 95 percent) on the prolonged impact of the coronavirus pandemic, the deepest contraction among Southeast Asian economies this year.
The rest of the region are also not doing well. Thailand’s economy was poised to contract 7.8 percent, while Singapore would shrink 6.2 percent. Malaysia and Indonesia were projected to slump 6 percent and 2.2 percent, respectively. The ADB had expected Vietnam as the only country escaping the region’s recession with a growth of 2.3 percent. ADB had predicted Southeast Asia’s economies to decline 4.4 percent overall in 2020.
The COVID-19 outbreak and the ensuing containment measures have taken their toll on the economies of Southeast Asia. Even the anticipated rebound in 2021 is less rosy as predicted by the ADB. Southeast Asia is now expected to expand 5.2 percent next year compared to the 5.5-percent growth the bank forecast in September.
Southeast Asia’s economic recovery in 2021 will hinge on how fast the region can gain access to effective vaccines that are now being distributed in Europe and the US. The developed nations are getting the first shot at the vaccines, along with Russia and China.
The population of most of Southeast Asia, including the Philippines, will likely receive inoculation sometime in the first quarter of 2021. This region, in the meantime, will have to continue enforcing restrictions on travel and the economy as a whole while waiting for the widespread immunization.
The same quarantine restrictions will surely be eased over the near-term period as the vaccination program progresses in Southeast Asia. The economies in the region will reopen further and only then can we expect the anticipated rebound in Southeast Asia.