ECONOMIC CONTRACTIONS OVERSHADOW ASEAN-6 RECOVERY

In 2021, the return to growth in major A sean economies rest son the containment of the corona virus disease 2019( C ovid

RECENTLY, the World Health Organization (WHO) stated that one in 10 people worldwide might have been infected by the coronavirus. Since the current world population is 7.8 billion, real infections would total 780 million rather than the 40 million confirmed cases today.

Among Southeast Asia’s major economies, the Asean-6, Indonesia and the Philippines have currently almost 360,000 confirmed cases each. According to WHO models, the real number could be 3.5 million or more.

Here’s what such projections would mean in Southeast Asia.

Modeled projections 10 times higher

In light of the daily confirmed cases, the Philippines was the epicenter of Covid-19 in Southeast Asia until recently. Now that aggregate role belongs to Indonesia, where daily cases average 4,000, as opposed to some 2,400 in the Philippines.

In Thailand and Vietnam, the confirmed cases have been low through much of the year. Malaysia is coping with a secondary wave with some 540 daily cases. In Singapore, Thailand and Vietnam, the number of cases remains under 10 ( seeFigurea).

However, modeled projections portray a very different reality in which the cases in Indonesia exceeded those in the Philippines already at the end of March. In this view, daily cases in Indonesia total almost 30,000 today; and in Philippines, nearly 22,000. Furthermore, bending of the curve has not really started yet in either country. In other Asean-6 countries, the projected cases remain only a fraction of those in Indonesia and the Philippines ( seeFigureb).

If the modeled estimates are some 10 times higher than the confirmed cases, the longer-term human costs and economic damage could prove significantly more burdensome than currently anticipated.

Major economic contractions across Southeast Asia

During the thuird quarter, economic outlook was downgraded for most AawN economies, which are currently amid a three-speed recovery.

In Indonesia, the year 2020 will result in a contraction (-1.5 percent). If infections are not contained in the coming weeks, outlook could further deteriorate. Despite pent-up demand for consumer durables, fiscal easing is

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