Economies In Asia Are Turning

1Q21 GDP recovery in North Asia, except for Japan

Umbrella, Buddhism, Monk, Monastery

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North Asia showed less of a fall in 2Q20 GDP (the height of the pandemic). Taiwan is the only country in Asia that maintained positive GDP growth throughout the whole crisis. It has also rebounded the strongest along with HK, which was devastated by protests before the pandemic. Japan is the one country that has seen its 1Q20 GDP growth take a downturn.

1Q21 GDP growth still negative in South East Asia

Southeast Asia was hit hard by the COVID-19 crisis, with every country showing deeply negative GDP growth in 1Q21. Most of these countries rely on tourism, which came to a dead stop. Philippines and Malaysia took the deepest dive in 2Q20 and, as of 1Q20 was about back to zero GDP growth. However, unlike Malaysia, the Philippines has been slowly creeping back.

1Q21 Consumption growth hit hard in Japan

In North Asia, Japan has seen a recent deceleration in consumption growth. Taiwan has had the strongest consumption recovery, though a recent outbreak of COVID-19 has slowed things a bit in 2Q21.

Thailand is heading into a double-dip

Thailand is the only country in South East Asia that has seen consumption growth fall in 1Q21 driven by further government-mandated lockdowns. The government has had lockdowns in most of 2Q21, so I would expect this trend to continue. No other country had positive growth in consumption; all are now close to zero.

A rise in oil price could hit Singapore, Thailand, and Korea hard

Oil imports as a percent of GDP were significant in five countries in Asia: Singapore, Thailand, Korea, Taiwan, and India. Vietnam and Indonesia had almost no dependency on imported oil and would not be impacted by rising oil prices. In fact, their production of oil could make them marginal beneficiaries.

COVID-19 impact on economies in Asia

The Philippines was hardest by COVID-19 in Asia, with GDP down 9.6% in 2020. This was followed by India, Hong Kong, and Thailand, each falling between 6 and 7%; additionally, they were all already decelerating in 2019.

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Disclaimer: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and ...

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