Economic activity next year in Malaysia and India, two of the countries most affected by COVID-19 outbreaks in recent months, is expected to recover faster than earlier forecast, latest surveys show.
Malaysia’s growth outlook was upgraded by the most in the region — 85 basis points to an expansion of 5.65% next year, according to the latest survey results compiled by Bloomberg. India was a close second, with its economy expected to grow 6.7%, 80 basis points faster than previously seen.
Economists have raised their growth projections for most Asian countries, except Thailand and New Zealand, which saw their outlooks slashed by at least 20 basis points, while Indonesia’s outlook was little changed.
Malaysia, which posted one of the world’s highest daily new infection rates over the past month and underwent a leadership change, doesn’t face any immediate economic risks. The economy’s performance was supported by improvement in domestic demand and continued robust exports, as second-quarter gross domestic product grew 16.1%.
Strong demand is keeping India on track to achieving the world’s fastest growth in the year to March, with new weekly infections dropping to the lowest in more than 6 months as of Sunday. The country’s economic losses have been limited so far, and it will be boosted by factors such as better-adapted firms, stable financial conditions and robust global growth spillovers, said Madhavi Arora, lead economist at Emkay Global Financial Services Ltd.
The survey on consumer price trends showed the biggest revision to New Zealand’s outlook, with inflation there seen accelerating by 90 basis points to 2.3% next year. Singapore and Australia are likely to follow suit with headline inflation seen rising by at least 40 basis points.
“The latest print for wages and inflation showed a strong uptick” for New Zealand, said Thomas Rudgley, economist at Oxford Economics, adding that some of these core drivers of upward pressure will re-emerge, until migration resumes and tightness in the labor market eases. — Bloomberg
