Emerging economic growth trends in Malaysia threatened by resurging pandemic, says latest world bank economic monitor
Malaysia’s economy is projected to grow by 4.5 percent in 2021 amid a dramatic resurgence of the COVID-19 virus beginning in mid-April 2021. This recent spike in infections is raising concerns about the overall capacity of Malaysia’s health system and the effects of the ongoing cycle of opening and closing the economy on households and firms, according to the World Bank Malaysia Economic Monitor: Weathering the Surge, launched. This latest projection is lower than earlier forecasts of 6.0 percent growth, reflecting a slower pathway toward suppressing the pandemic and a slower-than-expected vaccine rollout.
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China’s economic reckoning
Many observers look at China and see its leadership playing a masterful game. They see China refusing to bend its policies to fit global norms and successfully going its own way. The reality is that Beijing has tried to bend repeatedly under President Xi Jinping but has almost broken each time and has had to fall back on its old ways—which are not succeeding. The quantity and the quality of China’s growth (looking past the anomalies of the pandemic period) have both deteriorated. And unless the leadership of the Chinese Communist Party finds its way back to the path of economic liberalization, China’s future will look very different from the rosy picture the CCP paints. The urgency of reform is a happy result of China’s rise to middle-income status from the extreme poverty it experienced just a few decades ago. It is nothing to be ashamed of. But the applause that China has earned for its economic successes will subside if Xi fails to tolerate policy debate and accept more constrained political ambitions that admit the limits of the CCP’s capabilities.
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Vaccines, private consumption to determine India’s economic revival: Moody’s
The economic fallout of the second wave of the pandemic will remain restricted to the June quarter, although access to vaccines and revival in private consumption will determine the durability of India’s economic recovery, Moody’s Investors Service said on Wednesday. “Although contact-intensive sectors may continue to be hit harder than the rest of the economy, the economic damage from the second wave will likely remain restricted to the April-June quarter. We also expect the overall hit to India’s economy to be softer than that during the first wave last year. However, the pace of recovery will be determined by (1) access to and delivery of vaccines, and (2) the strength of the recovery in private consumption, which could be hampered by the deterioration of balance sheets of low- and middle-income households from job, income and wealth losses,” it said in a research note.
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Indonesia left with few options as covid-19 surge hits economy
Indonesia is left with few easy options to bolster its economy as a virus resurgence threatens its recovery at a time when it is seeking to rein in debt and the United States Federal Reserve is turning hawkish. South-east Asia’s largest economy cut rates last year and rolled out stimulus spending as the pandemic plunged the economy into the first contraction in more than 20 years. But just as it signals a return to growth this quarter, a worsening Covid-19 outbreak could halt the rebound in consumer spending and investment. This time, more central bank easing or aggressive state spending could exacerbate fund outflows from Indonesia as the Fed prepares to consider an end to its own pandemic-era support. The economic damage from the latest virus spike could be more severe than at the start of the year, as the highly transmissible delta variant, first identified in India, drives local infections, according to Moody’s Analytics economists Katrina Ell and Sonia Zhu.
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How Bangladesh became standout star in South Asia amidst Covid-19
Bangladesh, the shining model of development in South Asia, becomes everyone’s economic darling amidst Covid-19. The per capita income of Bangladesh in the fiscal year 2020-21 is higher than that of many neighbouring countries including India and Pakistan. Recently, Bangladesh has agreed to lend $200 million to debt-ridden Sri Lanka to bail out through currency swap. Bangladesh, once one of the most vulnerable economies, has now substantiated itself as the most successful economy of South Asia. How Bangladesh successfully managed Covid-19 and became top performing economy of South Asia? In March 1971, Sheikh Mujibur Rahman declared their independence from richer and more powerful Pakistan. The country was born through war and famine. Shortly after the independence of Bangladesh, Henry Kissinger, then the U.S. national security advisor, derisively referred to the country as a “Basket Case of Misery.”
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How has Russia’s economy fared in the pandemic era?
COVID-19 continues to upturn our lives and disrupt economic activity across the world. The World Bank estimates that well over 100 million people would be pushed into extreme poverty by the end of this year alone. Global food insecurity is on the rise, and the pandemic is expected to leave long-term scars, world over. How has Russia’s economy fared in the global “pandemic-onium”? What about jobs, food prices, and poverty? First, the economy. In our most recent World Bank Russia Economic Report, we examine how Russia’s GDP fell by 3 percent in 2020 compared to larger contractions of 3.8 percent in the world economy, 5.4 percent in advanced economies and 4.8 percent in most commodity-exporting economies. Several factors helped Russia perform relatively better. Well-known ones are Russia’s sizeable fiscal buffers and supportive monetary policy.
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Bank of Japan policymakers saw prospects of quicker recovery in April
Bank of Japan board members voiced hope in April that the massive stimulus deployed by nations will quicken Japan’s economic recovery, with domestic consumption potentially providing a tailwind as accumulated savings get spent.
While exports have already benefitted from solid global demand, consumption will rebound if vaccinated households splurge on “forced savings” accumulated during stay-at-home policies to prevent the spread of the COVID-19 virus, the BOJ members predicted in a policy meeting in April, its minutes showed on Wednesday. The upbeat assessment on the outlook reinforces market expectations that the central bank in the world’s third-biggest economy will keep monetary settings unchanged for the time being, in the hope its ultra-loose policy and pandemic-relief programmes will sustain a moderate recovery.