New outbreaks key risk to above-consensus forecasts

Our forecasts for GDP growth across Emerging Asia in 2021 are much higher than consensus expectations across the board, but fresh outbreaks in a number of countries mean the risks to our forecasts are to the downside. Korea, Malaysia, Hong Kong and Thailand have all had to introduce new restrictions in recent weeks to slow the rise in virus cases, and we recently downgraded our GDP growth forecasts for Malaysia after the government there introduced a new lockdown. The best-performing economies during the crisis have been China and Taiwan, but growth in both places will slow in q/q terms now that output gaps have closed. In the countries that have been hit worst economically, India and the Philippines, falling virus numbers and the imminent rollout of vaccines will allow restrictions to be eased further over the coming months, which should support recoveries. But GDP at the end of the year in both countries will still be well below where it would have been had the pandemic not happened.