The International Monetary Fund (IMF) on Tuesday cut its 2021 economic growth forecast for Asia to 6.5 per cent, citing “new peaks of the pandemic cycle.” Many countries in the region have reported record coronavirus-related deaths and case numbers in the months since the IMF’s April forecast of around 7.5-per-cent growth for this year. “The pandemic’s resurgence has triggered lockdowns that are hampering the recovery,” the IMF said, in its latest Asia-focused economic outlook. Despite the impact of the virus and the harsh restrictions applied in countries such as Australia and Malaysia, Asia is nonetheless is likely to remain the world’s fastest-growing region, the IMF said, while warning that the pandemic is widening a “divide” between the region’s advanced economies and their “emerging” or “developing” counterparts.
Much of East Asia and the Pacific faces far slower economic growth than was expected a few months ago, according to the World Bank, which on Tuesday slashed its outlook for most of the region’s 18 countries. Measured without China, the rest of the East Asia and Pacific’s “developing” economies are set to expand by 2.5 per cent this year, the bank warned, cutting a forecast of 4.4 per cent made in April before regional coronavirus case numbers and deaths soared. The less rosy outlook is due to pandemic restrictions “constraining economic activity,” according to the bank. It said the Delta variant and attempts to slow its spread were “disrupting production” and hindering prospects of a recovery.
DUBLIN — Asia’s land and freshwater species are “among the most vulnerable” to plastic contamination, according to a new report that the United Nations said is the first to look into how migratory animals are affected by the pollution. The UN’s Secretariat for the Convention on the Conservation of Migratory Species of Wild Animals (CMS) looked at the plight of animals living around the Mekong and Ganges river basins, from where around 200,000 tons of plastic rubbish flow into the Indian and Pacific Oceans each year. The CMS found that freshwater mammals such as river dolphins and dugongs are “particularly at risk” from drowning after getting tangled in rubbish such as discarded fishing gear or after swallowing plastic. Birds and smaller mammals along the two rivers have been found tangled in kite strings and fishing nets.
DUBLIN — Most East Asian countries “innovate less than would be expected given their per capita income levels” and could therefore struggle to sustain recent economic growth, according to the World Bank. Countries in the region are dogged by “insufficient staff skills and limited financing options,” the bank said in a report published late Tuesday, with firms often seeming wary of investing in innovation because “policies and institutions are often not aligned with firms’ capabilities and needs.” Lower-than-expected innovation could lead to questions about “whether the region’s past model of development can continue to deliver rapid growth and poverty reduction,” the bank said.
KUALA LUMPUR — The International Monetary Fund (IMF) believes Asia’s fast-growing economies will “come to a standstill” due to the coronavirus pandemic, faring worse than during the 2008-9 global financial crisis or the 1997-98 Asian crash. The region will experience zero growth for the first time since the 1960s, said Chang Yong Rhee, director of the IMF’s Asia and Pacific Department, who forecast that the economic impact of the pandemic will be “severe, across the board, and unprecedented.” Speaking during a press conference live-streamed from Washington, Rhee said Asia faces “a crisis like no other” due to the pandemic, which has killed over 136,000 people worldwide and prompted governments to impose lockdowns that have hampered commerce. “Containment measures are severely affecting economies,” Rhee said.
KUALA LUMPUR — Countries across East Asia and the Pacific face recession and rising poverty as economies grind to a halt due to the deadly coronavirus pandemic. In a report published on Tuesday, the World Bank warned that “significant economic pain seems unavoidable” across what was one of the world’s fastest-growing regions before the outbreak, which has killed almost 38,000 people worldwide. Though East Asia’s developing economies expanded at an estimated 5.8 per cent in 2019, some countries were already struggling with the knock-on effects of the China-United States trade war before the virus emerged in China in late 2019. Now, according to the bank, a possible 2.8 per cent region-wide contraction looms should a sustained pandemic force lengthy lockdowns and constrict business worldwide.
PHNOM PENH — Asian governments appear increasingly reluctant to implement the kind of pro-business reforms that could help offset slowing economic growth and other debilitating impacts of the US-China trade war. The World Bank’s latest “Doing Business” survey, a comparative global index of countries’ business environments previously known as “Ease of Doing Business”, shows the number of “business climate-enhancing” reforms implemented in East Asia and the Pacific fell by a quarter over the 12 months through May this year compared with the previous year. Referring to the region, the World Bank’s survey said “the overall pace of reforms slowed.” The Doing Business survey released last week compiles 11 criteria ranging from electricity access to labor market rules that it sees as crucial to the commercial success of small and medium-sized enterprises. The survey does not take into account wider issues such as national financial systems, macroeconomic policies or perceptions of political stability.
JAKARTA — As alcohol consumption rises across Asia, Indonesians, including local Catholics, appear to be oblivious to the region’s growing taste for a tipple, but Catholics elsewhere in Asia appear to be drinking more as incomes rise. New research published by The Lancet medical journal suggests Asia is the world’s booze growth market, as consumption is either leveling off or dropping in most other places. The report found that from 1990-2017, consumption increased by 104 percent across Southeast Asia and 54 percent in Western Pacific, going by to geographical regions designated by the World Health Organization (WHO). Some 79 percent of Indonesians are teetotalers, down from 84 percent in 1990, the data showed. This compares to over 90 percent of people who abstain from drinking for life in Afghanistan, Bangladesh and Pakistan, where Catholic charity Caritas has been working to help those young people who do fall prey to drug and alcohol addiction. “Muslim countries consume way less alcohol (than non-Muslim nations), and consequently (they have) substantially less of a problem drinking,” said Dr Jürgen Rehm from the University of Toronto, one of the authors of the report.
JAKARTA — As oil prices fluctuate and markets brace for the impact of the end of a US sanctions waiver on fuel purchases from Iran, Asia’s energy companies are making deals closer to home as bigger global players pull away from the region. Southeast Asia has already seen up to US$2.8 billion in mergers and acquisition (M&A) deals so far this year, according to Wood Mackenzie, a United Kingdom-based consultancy. Those deals have been led by US-based Murphy Oil selling its Malaysia operations to PTTEP, a subsidiary of Thailand’s national energy company, for $2.1 billion. Wood Mackenzie predicts that up to $14 billion of energy assets could change hands in the region this year if, as expected, more M&A deals like the Murphy-PTTEP deal are completed. Big deals such as the Murphy-PTTEP sale represent a significant jump, given that a typical Southeast Asian oil and gas M&A deal over the past five years has been worth a mere $111.6 million, according to S&P Global Market Intelligence data. Total annual energy deal values in Asia have ranged between $5.4 billion and $8.7 billion in the past four years, according to Wood Mackenzie data. Wood Mackenzie’s Andrew Harwood said that he expects buyers to be “Southeast Asian NOCs [national oil companies] and smaller regional players” with back-up from “some of the mid-tier IOCs [international oil companies] that retain Southeast Asian ambitions.”
JAKARTA — As hundreds of millions of Asians enjoy higher living standards in the move from lower to middle class, a warning of the trend’s sustainability came this month from Europe, where middle class expansion has stalled. The Organization for Economic Co-operation and Development (OECD), a Paris-based club that includes most of the world’s wealthiest nations, reported that many of its member states have “seen their standard of living stagnate or decline, while higher income groups have continued to accumulate income and wealth.” The middle class crisis in the West means disappointment for those who hoped that standards of living would continue to improve, as was the case for their forbears during the four or five decades after World II. But more recent times have seen the top 10% of earners’ share of total wealth rocket to nearly half the national average — findings contained in a new OECD report, Under Pressure: The Squeezed Middle Class, that in turn paints a grim picture for the third of member state populations described as “economically vulnerable.”