Unlocking the lockdown: Asia Pacific’s road to recovery
Deloitte Voice of Asia, Edition 7
Three themes impacting Asia's economic recovery
We expect that Asia-Pacific economies, led by China, are poised to begin an economic recovery sometime in the third quarter—but downside risks still remain.
THE COVID-19 pandemic has upended the global economy, but what lies ahead if the pandemic recedes by May or June? Our report, Unlocking the lockdown: Asia Pacific’s road to recovery, explores the likely trajectory of Asia’s economic recovery, investment implications and impact on global supply chains.
Assuming that the worst of the COVID-19 crisis will be over in the key economic powerhouses of North America and western Europe by the early part of Q3 2020, and given the further boost from aggressive, broad-based countercyclical measures, we expect that Asia-Pacific economies, led by China, are poised to begin an economic recovery sometime in the third quarter. Certainly, however, downside risks still remain. In addition to the potential for financial sector instability, a renewed trade war is possible since it is unlikely that China can deliver on its promises to buy more US goods (an additional US$200 billion in 2020 and 2021). Even in the absence of a trade war, trade tensions between China and the United States could well be a long-term theme that is further complicated by domestic politics in both countries and the geopolitical overlay.