The forecast is according to the latest Global Economic Outlook report from Oxford Economics, commissioned by chartered accountancy body ICAEW.
The report expects the overall GDP of the Southeast Asia will fall by 4.2% in 2020 while the strength of the rebound in economic activity in the near future remains uncertain, particularly in the fourth quarter of 2020.
According to the report, countries which have effectively contained the outbreak of the COVID-19 pandemic such as Thailand and Vietnam will see a stronger recovery than Indonesia and the Philippines, which are battling new waves of coronavirus outbreaks after restrictions were eased.
The report states that both Indonesia and the Philippines remain highly vulnerable as they have weaker public health infrastructure, lower levels of fiscal support available, and are much more consumer driven than others in the region.
Mark Billington, ICAEW regional director, Greater China and South-East Asia, said that the road to economic recovery in Southeast Asia will be long due to the tensions between the US and China, a long-term slowdown in global trade activity, and the potential of a prolonged COVID-19 pandemic.
“While each region’s economy has suffered due to the crisis, unique economic structures mean the crisis has played out in different ways. Ultimately, countries that can strike a balance between resuming economic activity and keeping the outbreak under control will see their economies bounce back faster than the rest," he noted.
