S&P Improved Its Outlook To 2020 For China's GDP
China is leading the recovery of the Asia-Pacific region after the crisis caused by the COVID-19 pandemic, according to a report by the international rating Agency S&P Global Ratings.
The Agency revised its GDP forecasts for the Asia-Pacific region for 2020 on the back of rising trade and consumer spending. China's GDP forecast for 2020 was improved to 2.1% growth from 1.2%, and for 2021 it was downgraded to 6.9% growth from 7.4%.
Next in terms of economic recovery are Vietnam (GDP growth of 1.9% in 2020 and 11.2% in 2021) and Taiwan, where, according to the Agency's forecasts, GDP growth will be 1% in 2020 and 3% in 2021.
The strongest declines in GDP among countries in the region are expected in the Philippines (a drop of 9.5% in 2020, followed by a recovery to the growth of 9.6% in 2021) and India, where the economy is estimated to decline by 9% in 2020, followed by a recovery to the growth of 10% in 2021. In General, the Agency's experts expect that the Asia-Pacific GDP will shrink by 2% in 2020 and move to the growth of 6.9% next year.
The employment situation will be a key factor in determining the pace of recovery. S&P expects that, in most cases, the employment rate will return to pre-COVID-19 levels no earlier than 2022. Also, it's worth noting that the growth of the economy in the Asia-Pacific region will be supported by trade and production. But full recovery will also require the recovery of the service sector.
"The pandemic is not over yet, but the worst of its economic consequences have passed," said Shaun Roache, chief Asia — Pacific Economist at S&P Global Ratings, in the report. "Governments are more focused on smoothing the COVID curves, with less use of nationwide restrictions," he added.