A covid resurgence in Japan and South Korea could affect the Asian economic recovery

SINGAPORE – As 2020 draws to a close, many investors see Asia as the region with one of the best economic prospects next year thanks to its relatively better control of the coronavirus outbreak.

Some analysts have warned that the recent rise in Covid cases in some countries threatens to dampen the region’s economic outlook.

“For some of the Asian giants, this year’s Covid-19 issues are unlikely to improve when the clock strikes 12 on New Year’s Eve,” research firm Pantheon Macroeconomics said.

Of course, the cases reported daily in many parts of Asia, where the virus first struck, remain lower compared to those in Europe and the United States, data collected by Johns Hopkins University showed.

But some countries are struggling with a much worse resurgence than they previously experienced in the pandemic. Even territories that had major successes in containing the virus may not be spared, with Taiwan this week reporting its first case transmitted locally since April 12, highlighting the difficulty in eradicating Covid.

Here’s a look at Asian economies struggling with a renewed rise in coronavirus infections and how that would affect their economic prospects.

• Covid-19 count: 207,007 confirmed confirmed cases and 2,941 deaths as of Wednesday, according to Hopkins data.

The number of daily coronavirus infections reported in Japan began to rise again in November and last week exceeded 3,000 for the first time, Hopkins data showed.

According to Reuters, medical groups in the country have warned that the health system is under considerable stress due to the pandemic. But Japanese Prime Minister Yoshihide Suga has refrained from declaring a state of national emergency, although he said he would suspend a travel subsidy program to curb the spread of the coronavirus, the news agency reported. news.

Pantheon Macroeconomics economists wrote in a report Wednesday that the Japanese government’s “relatively soft” “social distancing” rules don’t seem to work, and that could lead to tougher measures in the coming months.

“As such, a second, more effective state of emergency nationwide in Japan cannot be ruled out early next year,” economists said. This would affect the Japanese economy in the first quarter of 2021, they added.

• Covid-19 count: 53,533 confirmed confirmed cases and 756 deaths as of Wednesday, according to Hopkins data.

Like Japan, South Korea’s new daily cases reached unprecedented levels this month, surpassing 1,000 for the first time since the outbreak.

But unlike Japan, the government has taken a tougher stance on South Korea in response to the new wave of Covid cases.

The government on Tuesday announced a national ban on gathering five or more people and ordered the closure of tourist attractions, such as ski slopes and other winter sports facilities, Yonhap news agency reported.

Taking this step would contain most of South Korea’s economic damage during the fourth quarter of this year, according to Pantheon Macroeconomics.

• Covid-19 count: 98,737 cumulative confirmed cases and 444 deaths as of Wednesday, according to Hopkins data.

The Southeast Asian country reduced Covid cases before the last wave that began in October, Hopkins data showed. This led the government to impose a new round of partial closure measures in some parts of the country.

Economists at consulting firm Capital Economics said the outlook for Malaysia’s economy has become “less optimistic” this quarter, especially on the private consumption front.

“A second wave of the virus and the re-imposition of many restrictions on movement will have reversed Q3’s sharp rebound in private consumption. Google’s high-frequency mobility data suggests that social distancing remains a problem for the activity, ”they said in a report Tuesday.

But other parts of the economy, such as exports, should continue to perform strongly, so the overall economic success of the last resurgence is likely to be “much lower” than the previous wave, economists said. .