Charts show that Covid is hitting parts of Asia harder now than when the pandemic began
Southeast Asia experienced a major surge in Covid-19 cases last month that has shown little signs of slowing, and the situation is expected to delay most of the region’s economic recovery.
Major economies in this part of the world including Indonesia, Malaysia, Singapore, Thailand, Vietnam and the Philippines saw a sharp rise in daily reported cases and deaths from the disease in July.
Bank of America in a research note last week said its calculations showed average daily cases in the region surged by 162% last month to reach a new record of 72,200, while daily deaths tripled from 500 a day to 1,500 people on average.
The situation forced Southeast Asian governments to reintroduce lockdowns and social restrictions in an attempt to slow the spread as some ran out of hospital beds, medical equipment and oxygen supplies.
The highly contagious delta variant has also been detected in the region, which adds to concerns around limiting transmission and complicates reopening plans. Prolonged lockdowns can be extremely costly and damaging, particularly in countries like Indonesia where there is a large informal sector and many people earn daily wages.
Economic impact
Lockdowns and social restrictions are likely to affect economic activity in the region. Experts say the impact is set to be more pronounced in nations with tougher restrictions — including Malaysia, Vietnam and Indonesia.
This could potentially hit the region’s manufacturing sector, which mostly tends to be low-tech and labor intensive, making it more susceptible to pandemic-led disruptions.
Bank of America economists in a separate note last week said the recent lockdown measures in Southeast Asian economies “started to take a toll on factory output.” They pointed to a decline in manufacturing purchasing manager’s index, or PMI — a measure of factory activity — in places like Thailand, Indonesia, Malaysia and Vietnam.
Australian bank ANZ lowered GDP growth forecasts for Southeast Asia’s six major economies from 4.6% to 3.9% for 2021. For 2022, the prediction remained unchanged at 5.4%.
The downgrade excludes Singapore where growth indicators remain within expectations despite movement restrictions, according to Sanjay Mathur, chief economist for Southeast Asia and India at ANZ.
THe highlighted two new issues that could further set back growth prospects — first, the slowdown in factory activity, and second, slowing growth in China.
Vaccination efforts
The pace of vaccination in Southeast Asia differs by country. Information from Our World In Data showed that Malaysia and Singapore administered comparatively more daily doses per 100 people on a seven-day rolling average basis than the rest.
Bank of America predicted that most countries in Southeast Asia can potentially reach herd immunity by the first three months of 2022 if they ramp up their vaccination pace. Herd immunity occurs when a disease no longer transmits rapidly because most of the population is immune after vaccination or infection.
Reference: CNBC
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