Why is Southeast Asia lagging behind in global economic recovery – The Peninsula

Why is Southeast Asia lagging behind in global economic recovery – The Peninsula

Doha: Over the last several decades, Southeast Asia was a synonym for economic dynamism, opportunity and growth. This was the case particularly with the six largest economies of the Association of Southeast Asian Nation (ASEAN-6), including Indonesia, Thailand, Singapore, Malaysia, Vietnam and the Philippines.

In fact, ASEAN-6 economies have been outperforming most other countries when it comes to GDP expansion and other activity metrics until the beginning of 2020.

However, this multi-decade picture has changed markedly with the turnaround brought by the COVID-19 pandemic. Following the shock caused by the global spread of COVID-19, ASEAN-6 countires became laggards rather than leaders in terms of short-term economic performance.

Advanced economies underwent a rapid recovery from the pandemic. This year, or around two years from the height of the pandemic shock, when activity sunk into a deep downturn, the US and the Euro area are already expecting to be at or significantly above their pre-pandemic GDP trend. In contrast, the majority of ASEAN-6 economies are still well below their pre-pandemic trend. The only notable exception is Vietnam, who had a smaller shock from the pandemic due to effective policies to contain the virus spread in 2020 and also benefitted from a strong global demand for