There’s no doubt that the Asia-Pacific region was amongst the hardest hit at the beginning of the Covid-19 pandemic, with the coronavirus having originated in the Chinese province of Wuhan.
However, nations such as China and Vietnam have also been amongst the first to recover from the impact of the pandemic , both from a public health perspective and a socio-economic one.
In this post, we’ll ask whether Asian businesses are expected to fully recover and perform well in 2021, while also considering the prospects for wider growth in the region.
Then and Now – Asian Economies in 2020
Back in November, economists of five Southeast Asian nations (and India) once again revised downward their fiscal projections for 2020, as governments continue to count the rising cost of the coronavirus.
In fact, its projected that the so-called “ASEAN 5” nations (namely Indonesia, Malaysia, Singapore, Thailand and the Philippines) will record negative economic performance of -5.0% by the end of 2020, with Thailand suffering the worst impact thanks to a forecasted contraction of -8.5% .
However, economists are also forecasting a relatively sharp recovery towards the end of quarter four and the beginning of 2021, with vaccine development having accelerated at a rapid pace and numerous restrictions having already been removed in many Asian nations.
Not only this, but we’ve also seen that the level of contraction has declined with each passing quarter in 2020, with the performance of the ASEAN and India reflecting this trend.
The ASEAN 5 member states and India posted economic contractions of -10.7% and -9.2% in Q1, for example, while it’s projected that these figures will fall to -3.8% and -2.8% respectively by the end of the fourth quarter.
Looking Forward to 2021
Overall, the ASEAN 5 countries are expected to record average growth of 4.3% in 2021, with the projections for quarter two alone projected to be as high as 7.4%.
India is projected to grow even more significantly at a rate of 8.1% in 2021, with Asia-Pacific economies expected to lead the world in this respect next year.
This also hints at rapid and sustained growth for businesses in this region over the course of the next 12 months or so, with this trend similarly reflected by the projected salary increases throughout the Asia-Pacific area during the same period.
This is yet another area in which Asia-Pacific will lead the world during the next 12 months, with pay packets expected to rise by an average of 4.3% (in line with wider economic growth) in 2021.
This will represent a marked increase of 3.2% in comparison with 2020 , even as global wagers continue to falter and suffer from ongoing volatility.
Even after inflation, this wage increase in Asia will translate to average regional salary growth of 1.7%, which is well beyond the global standard of 0.5% and indicative of a strong and increasingly durable economic engine.
