The Philippines in 2020 underperformed, dragging Southeast Asia’s growth below expectations, according to the United Nations Conference on Trade and Development (UNCTAD).
In its Trade and Development Report Update: Out of the Frying Pan … into the Fire?,
UNCTAD said the Philippines and Malaysia “both struggled with elevated and persistent infection rates which were met with restrictions on population movements,”
“The economic fallout of these restrictions has been predictably severe with sustained output contractions in both countries,” the report added.
The Philippines’ GDP contracted to its lowest since World War II to 16.9 percent in the second quarter when strict quarantine protocolss were imposed to prevent the spread of the new coronavirus disease 2019.
GDP contraction eased to 11.9 percent by the third quarter and 8.3 percent in the fourth, to end 2020 GDP at -9.5 percent.
According to the report, the growth rate of Southeast Asia as a whole was below UNCTAD’s mid-2020 estimates as Malaysia and the Philippines, the larger economies in the region, underperformed vis-a-vis expectations.
The region posted a – 3.9 percent growth in 2020 from UNCTAD’s projection of -1.7 percent.
But the agency, however, revised its projection upwards for the region’s economic growth in 2021 “largely due to the greater than anticipated contraction in 2020.”
“(This) should engender a steeper recovery in 2021,” it said.
The report also sees an upturn in private consumption and exports throughout Southeast Asia which will drive the rebound this year.
UNCTAD now sees Southeast Asia to grow 5.1 percent from an earlier projection of 0.8 percent.
Meanwhile, UNCTAD sees the global economy to grow by 4.7 percent in 2021, faster than predicted in September but will be short of $10 trillion at the end of 2021 compared to pre-pandemic trends, with many developing countries hit the hardest.
The global economy’s output is estimated to have shrunk 3.9 percent last year.