Asia now the epicentre

The severe waves of COVID-19 that afflicted Emerging Europe and Latin America earlier in the year are now subsiding and the near-term economic outlook there has brightened. But several Asian economies have become the focus of concern instead. India accounts for about half of total global new virus cases, although the latest figures at least offer hope that the worst may be over. Other Asian economies such as Thailand, Taiwan and Vietnam that had, up till now, controlled the virus very well have suffered a rise in new cases (albeit to still very low levels in the latter two). (See Chart 1.) That is likely to weigh on activity and also serves as a reminder that, for the many EMs where vaccination coverage remains low, the threat of new outbreaks will persist.