South East Asia faces headwinds from China and war in Ukraine: QNB report – The Peninsula

South East Asia faces headwinds from China and war in Ukraine: QNB report – The Peninsula

Doha: The global economy continues to recover from the impact of the COVID-19 pandemic. However, new stagflationary shocks have hit in early 2022. The war in Ukraine and the interaction of the highly-contagious Omicron variant with China’s “zero-COVID” policy are pushing up global inflation, but down on global economic (GDP) growth. However, these shocks have divergent impacts on different regions and countries.

In recent weeks QNB has considered the impact of recovery from the pandemic and these news shocks on the global economy, global liquidity, the US, Europe and China. This week, QNB turns its attention to South East Asia (SEA). Since the outbreak of the pandemic, SEA lagged the performance of advanced economies due to initially low vaccination rates, supply chain constraints and less accommodative monetary and fiscal policies.

Moving forward, the outlook for SEA is of continued recovery from the pandemic. Here QNB considers four representative countries, looking at two net commodity importers, Thailand and Vietnam, before it turns its attention to two net commodity exporters, Indonesia and Malaysia.

A high level of vaccination has allowed Thailand to remain open during the Omicron wave in early 2022, but a full recovery from the pandemic will be held back by other factors.

Despite