Signs of Upturn in Economic Outlook
Unemployment Rate to Improve, Caution over Omicron
The Japan Center for Economic Research and Nikkei conducted the twenty-fourth quarterly consensus survey on Asian economies from November 19 to December 13, collecting 38 answers from economists and analysts in the five biggest members of the Association of Southeast Asian Nations—Indonesia, Malaysia, the Philippines, Singapore, and Thailand—and in India.
Widespread optimism distinguishes this survey from the past seven surveys, which have been pessimistic since the onset of the COVID-19 pandemic in January 2021. The business sentiment damaged by two years of COVID-19 has finally begun to show signs of recovery. The average growth rate of the five ASEAN countries in 2021 was 3.6%, up 0.1 points from the previous survey. The growth rate of India in fiscal 2021 (2021/2022) rose to 9.5%, up 0.1 points (Table 1).
Economists expect GDP levels to recover to pre-pandemic levels (2019) in Indonesia, Singapore, and India in 2021, the Philippines and Malaysia in 2022, and Thailand in 2023.
By mid-December 2021, the number of people infected with COVID-19 has decreased significantly in all Asian countries (Graph 1). Malaysia, where the number of newly infected people exceeded 600 per million (rolling 7-day average) in August, has settled down to about 150 in December. In Singapore new cases, having surged to nearly 700 in October, are approaching 100 in December. Thailand’s cases exceeded 300 in August but are down to less than 100 in December.
The outcome of this survey was also reported at Nikkei Asia. (December 20, 2021)
◆ Main points of the survey
- Widspread optimism distinguishes this survey from the past seven surveys, which have been pessimistic since the onset of the COVID-19 pandemic in January 2021. The average growth rate of the five ASEAN countries in 2021 was 3.6%, up 0.1 points from the previous survey. India’s growth rate in fiscal 2021 (2021/2022) rose to 9.5%, up 0.1 points.
- Among the five ASEAN countries, the Philippines received a considerable upward revision of 0.8 points in 2021 and 0.5 points in 2022. Expectations are rising for increased spending ahead of the May 2022 presidential election.
- Only in Malaysia has the forecast has been revised downward for both 2021 and 2022. Still, the momentum for recovery continues. Malaysian economists demonstrate their expectations for economic recovery in their unemployment rate outlook. The other five Asian countries’ unemployment rates are also expected to improve each year toward 2023.
- Economists’ shifting economic sentiments are also reflected in the ranking of risk factors. “COVID shock” maintains its number one position in four countries, but in India and Indonesia “inflation risk” and “U.S. monetary policy” risks replace “COVID shock” for the first time since the March 2020 survey.
Indonesia: Dendi Ramdani, head of industry and regional research department, Bank Mandiri; Umar Juoro, senior fellow, The Habibie Center; Wisnu Wardana, economist, PT Bank Danamon Indonesia Tbk.
Malaysia: Suhaimi Ilias, chief economist, Maybank Investment Bank; Wan Suhaimie bin Wan Mohd Saidie, head, economic research, Kenanga Investment Bank; Vincent Loo Yeong Hong, senior economist, KAF Research; Lee Heng Guie, executive director, Socio-Economic Research Centre (SERC)
Philippines: Jonathan Ravelas, chief market strategist, BDO Unibank Inc.; Pauline Revillas, research analyst, Metrobank; Emilio S. Neri Jr., vice president and lead economist, Bank of the Philippine Islands; Carlo Asuncion, chief economist, Union Bank of the Philippines; Angela Hsieh, regional economist, director, Barclays Bank, Singapore; Mitzie Conchada, associate dean, school of economics, De La Salle University
Singapore: Manu Bhaskaran, CEO, Centennial Asia Advisors; Randolph Tan, director, Centre for Applied Research, Singapore University of Social Sciences
Thailand: Poonyawat Sreesing, senior economist, Siam Commercial Bank – Economic Intelligence Center; Lalita Thienprasiddhi, senior resercher, Kasikorn Research Center; Somprawin Manprasert, head of research division and chief economist, Bank of Ayudhya PCL; Shreya Sodhani, regional economist, Barclays Bank, Singapore; Amonthep Chawla, head of research, CIMB Thai Bank
India: Punit Srivastava, head of research, Daiwa Capital Markets India; Dharmakirti Joshi, chief economist, CRISIL; Tirthankar Patnaik, chief economist, National Stock Exchange of India; Jyoti Vij, deputy secretary general, the Federation of Indian Chambers of Commerce and Industry (FICCI); Bidisha Ganguly, chief economist, Confederation of Indian Industry; Rahul Bajoria, director, regional economist, Barclays Bank; Aurodeep Nandi, India economist, Nomura India; Sonal Varma, chief India economist, Nomura India
For multiple countries: Euben Paracuelles, chief economist, Nomura Singapore; Nicholas Mapa, senior economist, ING Bank Philippines; Brian Tan, Regional economist, VP, Barclays Bank, Singapore
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