THE rollout of vaccines, increase in government spending, and easing of monetary restrictions would boost GDP growth among Association of Southeast Asian Nations (Asean) nations to an average of 6 percent this year, according to London-based data analytics firm GlobalData.
In a statement, GlobalData said Vietnam would post the fastest growth in the region at 8.5 percent despite averting a contraction in 2020.
The Philippine economy is seen to follow with a projected growth of 8.4 percent this year, followed by Malaysia with 7.1 percent.
“Increasing investment and recognizing open trade are key to put Asean economies on a steady growth path, along with effective vaccination for Covid-19 in 2021. An uptick in retail trade and growing demand for e-commerce will bring in new capital to spur growth,” GlobalData Economic Research Analyst Gargi Rao said.
Rao said the implementation of non-tariff measures on essential goods among the Asean nations under the Regional Comprehensive Economic Partnership (RCEP) will also boost growth.
With the RCEP, trade growth in the Asean as well as Australia and New Zealand, which are included in the world’s largest trade agreement to date, would see a “sharp recovery” in the second half of 2021.
“The new free trade agreements among Asean, Australia and New Zealand will bring in new trade and employment opportunities for 2021 and beyond. The need of the hour is to facilitate business activities through effective cooperation among the Asean nations,” Rao said.
She said data from the Purchasing Manager’s Index (PMI) also showed a recovery. Singapore posted a 52.9 in PMI for manufacturing followed by the Philippines at 52.5; Indonesia, 52.2; and Vietnam, 51.3.
In April 2020, the PMI was below 50, indicating a steep contraction in economic activities among Asean economies. This was largely due to the mobility restrictions imposed to contain the spread of Covid-19.
The PMI for manufacturing in the Philippines posted the steepest dive in April with a contraction of 31.6, followed by Malaysia at 31.3 and Indonesia at 27.5.
“With an improving health sector, global vaccine rollouts, gradual recovery in global demand and strong output growth, the Asean manufacturing sector is set to rebound in 2021,” GlobalData said in a statement.
Earlier, the Department of Trade and Industry (DTI) expressed hope policymakers would ratify the RCEP within 2021 to boost the country’s economic recovery from the unprecedented damage wrought by the Covid-19 pandemic.
In an interview with reporters, Trade Assistant Secretary Allan B. Gepty said the DTI expects the RCEP’s ratification and Senate concurrence by next year.
The RCEP is a multilateral trade deal concluded in November involving the 10 Southeast Asian nations and trading partners Australia, China, Japan, New Zealand and South Korea.
As with any free-trade agreement (FTA), the RCEP has to be approved by President Duterte and must be ratified by the Senate before it takes effect on the domestic end.
