Economic activity in Asean+3 is now projected to expand by an aggregate 6.1 per cent in 2021, down from the 6.7 per cent forecast earlier this year, after posting flat growth in 2020, according to the Asean+3 Macroeconomic Research Office (AMRO) on Thursday.
The Plus-3 economies are continuing to drive regional recovery, especially China, which has fully vaccinated two-thirds of its population, benefiting from effective containment measures that have allowed the domestic economy to open quite fully, noted the report.
Growth for the Asean sub-region is however forecast to be much slower at 2.7 per cent, due to recurring new waves of Covid-19 infections and the re-tightening of containment measures.
New complications that have come online in the past six months include the potential for a sudden and sharper-than-expected tightening of US monetary conditions, she noted. This could increase volatility in the region and raise domestic interest rates at a time when financial conditions should be kept as accommodating as possible.