"Asian countries in the meantime will be forced to rely on their domestic economy for growth."
The exponential rise in COVID-19 infections in Europe and the US has alarmed global businessmen and market investors. Ensuing lockdowns to contain the virus spread, especially in France and Germany, will mean a stalled re-opening of economies in the continent and that the road to recovery is nowhere near.
Asian stock markets followed the bloodbath in Wall Street and European bourses the other day after France announced a nationwide lockdown. Wall Street plunged by more than three percent, while Frankfurt sank more than four percent. Paris slumped three percent.
France’s decision to impose a total lockdown is sending fears that Britain could be the next nation to institute similar harsh measures. Germany has already announced it would impose rigid curbs to slow down the infection and prevent its hospitals from being overwhelmed with patients.
The spike in COVID-19 infections in the US and Europe and the response to lock down business establishments and restrict the travel of their population can only mean further economic hardships in the two continents and their trading partners as well. The US and the major economies of Europe are Asia’s main export markets. Lower consumer demand from the two economic powerhouses will reduce manufacturing output of Asian exporting countries, including the Philippines.
World travel will also suffer further from Europe’s lockdown and the continued rise in infections. Asian airlines, for one, will have to dig in for a longer haul as the West is not ready in the near term to accommodate tourists from this region.
With Europe in a fix and the US grappling with its own virus problem, Asian countries in the meantime will be forced to rely on their domestic economy for growth.
For the Philippines, it must continue investing in infrastructure projects to secure the future of the economy. Infrastructure projects immediately provide jobs. Their completion will give more job opportunities to several segments of the economy and the rural population. Infrastructure projects will also cause an exponential rise in the gross domestic product by opening the urban markets to the vegetable farms and fish output of the rural areas.