Southeast Asia’s emerging economies are some of the most successful in the
world. Economic recovery from the Covid-19 pandemic and Russia’s invasion of
Ukraine is underway, and the region has returned to relatively strong
growth. Nonetheless, the impact from these shocks and ongoing developments
in the world economy has been substantial. This report focuses on how the
high-performing economies of Emerging Southeast Asia — Cambodia, Indonesia,
Malaysia, the Philippines, Thailand, and Vietnam — have been affected and
their outlook for growth and development reshaped by the tumultuous events
of recent years.
Key findings Emerging Southeast Asia managed the economic impacts of Covid-19 and
Russia’s invasion of Ukraine relatively well. Nonetheless, the costs have
been high in terms of foregone growth, weakened investment, sharp learning
losses, slower poverty reduction, and constrained policy space due to
large budget deficits and still elevated inflation. A tepid global recovery and high exposure to a weakened Chinese economy
present substantial headwinds. Meanwhile, gains from the expected
diversification of trade and investment out of China have so far been
limited, reflecting China’s continued dominance within manufacturing
supply chains and tight global financial conditions. The immediate policy challenge is to address the economic and social scars
of the pandemic while maintaining a credible and sustainable macroeconomic
framework. Generating more tax revenue is a key medium-term priority.
Traditional competitiveness reforms coupled with a focus on meeting new
priorities, such as the need for clean energy, would help capitalise on
the opportunities from shifting international trade and investment.
Source link : https://interactives.lowyinstitute.org/features/constrained-recovery-shocks-emerging-southeast-asia/
Author :
Publish date : 2024-05-30 08:29:10
Copyright for syndicated content belongs to the linked Source.
