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Black zero for Asia – despite Corona

According to the ADB, the accustomed growth of 6.2% will be achieved again next year. China’s contributions are decisive for the overall positive result. The greatest burden comes from the slump in demand in the established industrialized countries. On both sides of the Atlantic, both private consumption and the consumption of supplies from Asian production are declining.

In addition there is the direct effect of the pandemic with a practically complete standstill of tourism. The third factor is the tightening of financing conditions, which noticeably slows investment activity. At least for the weaker countries, the ADB also speaks of the risk of a balance of payments crisis.

This factor had also affected trade finance in the 2008/9 crisis. In general, the estimates are subject to the proviso that the corona pandemic will not flare up again with a second wave. East Asia with China at the top will therefore be the only region in the reporting area whose GDP will be positive this year (+ 1.3%), pushed by the People’s Republic of China (+ 1.8%) and Taiwan (+0.8 %). Strong support comes from loose monetary policy and increased government spending in the PRC. The coming year should then return to the usual growth figures of 6.8% for the entire region (+ 7.4% PR China).

According to the ADB forecast, the slump in the Central Asian republics of the former USSR will remain within limits with -0.5% in the current year and the upswing with 4.2% in the coming year. Weaker results are seen for Kyrgyzstan and the two Caucasus republics Armenia (3.5 and + 3.5%) and Georgia (-5 and + 5%), which will not catch up until the beginning of 2022.

The slump in tourism left particularly deep marks in the holiday centers of South and Southeast Asia (Maldives –11.3%, Sri Lanka –6.1%, Thailand –6.5%, Fiji –15%). The ADB anticipates India (-4% and + 5%), which means a step backwards in competition with rival China. Among the more industrialized ADB countries, Vietnam alone is expected to come through the crisis without a recession. The estimate of 4.1% and 6.8% growth for 2020/21 looks extremely optimistic and apparently is crucially based on the fact that the corona pandemic has already been overcome there and the country continues to benefit from the American-Chinese trade dispute as an alternative to the Chinese Suppliers.

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