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ICAEW: ASEAN economies rebounding in 2021 but dependent on a few factors

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A reader of kopiandproperty.com posted this news. Briefly, it says positive things about ASEAN economies. ASEAN economies are seen to be rebounding in 2021. Happy reading to understand more and my personal thoughts right at the end of why 2021 will be a good year if we look at 2020 where the demand has been curbed due to circumstances.

ASEAN economies
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Article in malaymail.com. Institute of Chartered Accountants in England and Wales (ICAEW) has the following comments about ASEAN and Malaysia in this article.

“While uncertainties remain, and most economies will take time to recoup lost output, risks have become more balanced with recent positive news on vaccines and regional growth prospects for Southeast Asia in the medium to long term are optimistic.”

Latest economic outlook from Oxford Economics, commissioned by ICAEW, predicted that GDP across South-east Asia will contract by 4.1 per cent in 2020 before a sharp rebound to 6.2 per cent in 2021. (This is an increase of close to 50% rebound, yes, V-shaped)

As for Malaysia, it says that the extension and widening of cases under the CMCO has put a strain on economic activities. It said, “However, the government has announced a highly expansionary budget for 2021, with an increased focus on infrastructure investment. This will support a solid rebound in economic growth to 6.2 per cent next year, after a 5.6 per cent contraction this year.” Please do read their full report, quite a comprehensive one touching on ASEAN economies here: Article in malaymail.com

My 2 cents. Without asking any prominent economists or even doing a super thorough analysis, it is easy to understand that as long as most people have jobs, then all the potential demand for goods and services which did not happen in 2020 will happen in 2021. Even if we assume the demand has reduced, it is still going to be a much better 2021 versus 2020 because the demand for goods and services in 2021 would include all the postponed demand for goods and services from 2021.

These demand can be as simple as the postponed holidays… delayed property purchase… coffee sessions with all your close friends which did not happen and more. Perhaps the question is, could 2021 be that year when everything really normalise. This question will give us the answer on whether 2022 will be another good year. Happy reading.

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