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Thread: Covid-19 Effect on LOS

  1. #1

    Covid-19 Effect on LOS

    Growth Downgrades in Southeast Asia Fuel Calls for More Stimulus
    By Michelle Jamrisko ...more here:
    February 26, 2020, 4:00 AM GMT+7

    • Region’s economic growth forecasts slide on outbreak worries
    • Indonesia, Malaysia among those signaling more fiscal support

    Construction workers labor on a building towering above the business district of Jakarta, Indonesia. Photographer: Dimas Ardian/Bloomberg

    The acceleration of the coronavirus outbreak over the past week is putting downside pressure on forecasts for Southeast Asian economies, leading policy makers to unveil support measures.

    Economists have slashed this year’s growth forecasts for China to about 5.5%, compared with 6.1% last year. With most of Southeast Asia heavily reliant on China-linked supply chains and tourism, that has meant growth downgrades in the region as well: Thailand, for example, is seen slowing to barely above 2% this year, from 2.4% in 2019.

    Virus Stall

    Growth forecasts across Southeast Asia weaken on coronavirus worries, while Philippines seen as less vulnerable

    Almost all of Southeast Asia’s top six economies have cut interest rates this year, and economists are betting on more to come. On the fiscal side, Singapore has taken the lead with significant support to cushion its economy from the impact of the virus.

    “We had previously expected the dovish wave in 2019 to subside, as global growth bottoms out and picked up slightly in 2020,” said Edward Lee, an economist for South and Southeast Asia at Standard Chartered Plc in Singapore.

    Given the virus outbreak, “we had already seen quite a few economies easing monetary policies and some sanctioning fiscal policies to mitigate the impact,” Lee said, with more rate cuts likely in Malaysia, the Philippines and Thailand.

    Thailand’s heavy reliance on tourism, particularly from China, leaves it among the most exposed in the region as travel restrictions weigh on the sector. The government estimates the number of visitors could drop by about 2.8 million compared to last year, to 37 million.

    The baht, the strongest currency in the region last year, has plunged so far in 2020. Officials have said they’re comfortable with further currency weakness.

    POLICY RESPONSE: The Bank of Thailand cut its interest rate to a record low Feb. 5, and said it has more room to ease. Its next scheduled meeting is March 25.

    Long-awaited budget legislation has been approved by parliament and awaits royal assent, with an expected 400 billion baht ($12.6 billion) in investment likely to filter through to the economy...
    Last edited by harrymsmarkle; 02-26-2020 at 05:55 AM.
    Majestically enthroned amid the vulgar herd

  2. #2
    Construction workers labor on a building towering above the business district of Jakarta, Indonesia. Photographer: Dimas Ardian/Bloomberg
    wow , PPE

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