Japan, Singapore’s Economic Hit by Covid-19 to Contribute to Zero 2020 Growth in APAC
Japan and Singapore’s economies will be the hardest hit by the Coronavirus epidemic. This continues despite the two countries continuing to enact strict measures to slow down the spread of the disease. This is according to Moody’s Analytics’ Chief Pacific Economist, Steve Cochraine.
Japan’s economy was already down by 6.3% in the third quarter of 2019. Meanwhile, Singapore recorded a decrease of 2.2% in the first quarter of 2020.
These previously weak economic states worsened in March during the peak of lockdown measures. It will now likely land both countries in dire economic times ahead.
Cochraine Said “Japan already was in recession coming into this; the first quarter for Singapore was very weak.”.
Both Countries Were The Earliest To Detect Infection Cases Outside Of China
Statistics by John Hopkins University recorded Japan and Singapore as the earliest detectors of the COVID-19 spread outside of its epicenter in China. Since then, both countries have cumulatively recorded over 13,000 infection cases, which are among the highest in Asia.
Despite enacting strict measures, they seem to be experiencing further outbreaks. This will put additional pressure on their economies, unlike China, which reports to have the outbreak under control.
In Singapore, the Ministry of Trade and Industry reported the deepest year-over-year contraction since 2009, sighting the uncertainties of the outbreak and the toll it takes on health systems as the main culprits.
“The wide forecast range is to account for heightened uncertainties in the global economy, given the unprecedented nature of the COVID-19 outbreak, including the public health measures taken in many countries to contain the outbreak.”
In Japan, the government is open to enacting stricter measures to combat further outbreaks in the country.
“There is potential in Japan, if the coronavirus spreads further, there could be more of a real lockdown rather than the kind of soft lockdown that’s in Japan right now,” Cochraine added.
IMF Estimates Zero Growth in the APAC Region For 2020
Speaking about the projected global economy, The International Monetary Fund warned that the economic regress in Japan and Singapore will play a major role in affecting the economic growth in the APAC region.
The partial lockdown has seen the shutdown of non-essentials like schools and workplaces in Singapore. Meanwhile, in Japan, the country is in a nationwide state of emergency, with a few essential businesses allowed to open.
“The combination of the, in a sense, closed economies in South East Asia and very weak export trends softening in North Asia’s, it’s going to be a tough, tough quarter for the whole APAC region.”
According to the IMF, these factors will be among the reasons as to why the APAC region, which has been the fastest-growing region in the world, will experience its first economic regression in 60 years.
“This crisis is like no other. It is worse than the Global Financial Crisis, and Asia is not immune.”. This was according to the Director of the Asia and Pacific Department at the IMF, Chang Yong Rhee.
Earlier in March, Singapore’s Foreign Minister warned that the coronavirus outbreak would last up to one year. Furthermore, it would have adverse social and economic impacts on all countries in the world.
“This is an acid test of every single country’s quality of healthcare, the standard of governance, and social capital. And if any one of this tripod is weak, it will be exposed and exposed quite unmercifully by this epidemic.”
China’s Economy Is the Only One Expected to Experience Some Growth in 2020
The Chinese government has stated countless times that the coronavirus outbreak in the country is under control, with businesses starting to open gradually even in Wuhan.
The IMF’s outlook on the global economy stated that China’s economy might grow by 1.2% in 2020. This is despite criticism from the US and other European countries. Specifically, in the lack of transparency in reporting the exact extent of the spread of the outbreak in China,
However, the IMF added that the projected recovery for global growth still remains uncertain.
“It continues to rely on recoveries in stressed and underperforming merging market economies, as growth in advanced economies stabilizes as close to current levels.”
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