Rising COVID-19 cases cloud Asean-6’s growth prospects

With an increase in COVID-19 infections in the region, the economic outlook for the Association of Southeast Asian Nations Plus 6 (Asean-6), including the Philippines, has weakened in the third current quarter, UK think tank Oxford Economics said on Friday. .

“Our growth tracker confirms that economic momentum slowed for the ASEAN-6 economies in July. We expect growth to deteriorate further in the near term as tight restrictions in several ASEAN economies weigh on activity, ”Oxford Economics Senior Economist Sung Eun Jung said in a statement. report.

Besides the Philippines, the Asean-6 included Indonesia, Malaysia, Singapore, Thailand and Vietnam.

Across the region, “exports and industrial production continued to contribute positively to our tracker, but to a lesser extent than at the start of the year,” Oxford Economics said.

“Retail sales slowed growth across the region in July after a brief rebound,” he added.

Outbreaks

Oxford Economics attributed the less optimistic regional outlook to recent outbreaks of COVID-19 in those countries, which have weighed on their economic recovery.

“An increase in COVID-19 cases in the region has led to renewed anxiety and tighter restrictions imposed by the government from June. Restrictions have either been tightened or extended through August for most of the Asean-6 economies, and daily infections continue to rise rapidly in Malaysia, the Philippines and Vietnam, ”he said. .

Oxford Economics expects Asean-6 as a whole to grow 2.7% year-on-year in the third quarter.

In the case of the Philippines, Oxford Economics noted that mobility restrictions were further tightened in August amid the threat of the more infectious Delta variant of COVID-19.

“The good end of the second quarter with a significant rebound in industrial production in June is unlikely to continue into the third quarter. Therefore, we expect the Philippines growth tracker to reverse sharply in August, ”Oxford Economics said.

—Ben O. from Vera

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