Asean-6 growth to pick up from end-2021 as economies reopen: report

GROWTH in the powerhouse Asean-6 economies is expected to pick up in the final stretch of 2021 and head for above-trend growth of 6.3 per cent in 2022 and 6.6 per cent in 2023, according to an economic forecast released on Wednesday (Nov 17).

That is even though a fourth-quarter economic recovery - projected to come on the back of improved consumer sentiment and an easing labour crunch in manufacturing - will still not be enough to make up for the slowdown in the first 9 months.

"While growth in the Asean-6 economies slowed sharply in the third quarter, our monthly growth tracker reveals the deceleration stabilising by quarter-end," said Oxford Economics senior economist Jung Sung Eun, noting that exports and air traffic growth helped to make up for slumps in retail sales and manufacturing in the period.

Despite easing Covid-19 restrictions and the improvement of domestic demand, economic activity was still weighed down by supply-side disruption, which affected industrial production and kept car sales subdued in Malaysia, Thailand and Vietnam.

Meanwhile, air transport "would require many more months of strong growth to recover to pre-pandemic levels", even though contributions from the sector have turned positive as international borders reopen, Jung said in her report.

Still, she added: "With restrictions generally easing, we expect the uptrend in our growth tracker will broaden across the region."