Trade, factories to fuel Asean-6 economic recovery; retail sales a drag: report

TRADE and manufacturing are driving the Covid-19 economic recovery in the Asean-6 region, according to analysis by Oxford Economics.

Besides "underlying momentum for exports", industrial production is expected to ramp up from the second quarter onwards.

Oxford Economics estimated that the economy contracted by a combined 1.5 per cent in Indonesia, Malaysia, the Philippines, Thailand, Singapore and Vietnam in Q1 2021 - a pickup from the 3 per cent decline in Q4 2020.

Still, the research firm called retail sales a drag on most of the region, except for wholesale and retail trade expansions in Singapore and Vietnam.

"We're more upbeat in our growth outlook for Singapore and Vietnam, which are externally oriented and therefore can benefit more from rebounding global trade," economist Jung Sung Eun in a report out on Monday.

"They also have a better record of containing domestic Covid outbreaks, which will help to sustain the ongoing recovery in domestic demand."

But the firm was cautious about the outlook for Indonesia and Malaysia, despite their higher auto production and sales, as well as a railway freight transport recovery in Indonesia.

Oxford Economics also cited downside risks to its growth forecasts for Thailand and the Philippines, on worsening outbreaks there.