Countries having difficulty containing the COVID-19 pandemic like the Philippines will not only experience a deep recession this year but also will suffer from economic damage that may take longer to heal, according to think tank Japan Center for Economic Research (JCER).
In a Dec. 10 report titled “Asia in the coronavirus disaster: Which countries are emerging?” JCER said it expected the Philippines’ gross domestic product (GDP) to shrink by over 8 percent this year.
Economic managers last week projected GDP sliding by a record 8.5-9.5 percent in 2020, poised to be the biggest postwar contraction, no thanks to weak consumer confidence and the still elevated number of COVID-19 cases restricting the economy.
JCER said “there is no end in sight to the outbreaks in India, the Philippines and Indonesia.” Adding to their woes are weaker remittances from their citizens working overseas—or those susceptible to the global downturn.
For countries still struggling with the pandemic, specifically Canada, India, Indonesia, the Philippines and the United States, JCER said they “would be hit especially severely in the medium term, with urbanization rates lagging behind.”
In contrast, countries which earlier on contained the pandemic would reap long-term benefits in terms of sustained economic expansion, JCER said.
For instance, JCER said only China, Taiwan and Vietnam, three countries which have successfully kept infections low to date, would be among the very few growing their economies this year.
Even as China’s growth could slow in the medium term due to a demographic decline and slowing investment, its steady expansion would allow it to surpass the US’s GDP in 2029, JCER said.
Meanwhile, Vietnam was seen maintaining a 6-percent annual growth up to 2035 due to rising exports. JCER said Vietnam’s economy would even be bigger than Taiwan’s and would be Asean’s second-biggest after Indonesia 15 years from now.