Macro Insights Weekly: Pandemic and income in Asia
- Despite ongoing stumbles, China and Vietnam should look back at the pandemic as a relative blip
- India, Indonesia, and the Philippines have suffered setbacks in real per capita income…
- … it will be mid-decade before trend path of income is restored
- For a number of others, the setback is particularly grave
- Hong Kong and Thailand came to the pandemic on a weak footing, and will emerge even weaker
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Commentary: Pandemic and income in Asia
The coronavirus pandemic continues with ebbs and flows, with some economies seeing infections rate ease after surges earlier this year, while others seeing high rates of outbreak despite mass vaccination. Overall, though, vaccine rollout, approval of anti-viral pills, and immunity building up among those infected are taking the world closer to the final chapter of the pandemic.
Already, it is clear that lasting imprints on medium-term performance would be a legacy of this pandemic. Nations with expedited vaccine access and early policy support are going to come out ahead, as per our analysis and consensus forecast.
A simple exercise sheds light on this eventuality. For eleven key Asian economies, we set 2010’s real per capita GDP to 100, and track them through end-2022, with the last two data points take from the October IMF World Economic Outlook projections. The resulting charts show wide divergence in the region as the pandemic winds down.
China and Vietnam would end 2022 looking back at the pandemic as a relatively small blip, although there have been stumbles along the way. India, Indonesia, and the Philippines have suffered setbacks, and it will be mid-decade before trend path of income is restored.
For a number of others, the setback is grave. Thailand and Hong Kong in particular came to the pandemic on a weak footing, and will emerge even weaker, unfortunately.
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