{
  "title": "Transcript of Press Briefing on the October 2020 Asia Pacific Regional Economic Outlook",
  "publication": "IMF News, October 21, 2020",
  "sourceUrl": "https://www.imf.org/en/news/articles/2020/10/21/tr102120-transcript-of-asia-pacific-regional-economic-outlook-press-briefing",
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  "summary": "The Asia-Pacific region has been hit hard by the pandemic, with regional growth projected at -2.2 percent for 2020.",
  "publishDate": "2020-10-21",
  "sections": [
    {
      "heading": "Regional overview and headline projections",
      "content": "- The Asia-Pacific region has been hit hard by the pandemic, with regional growth projected at -2.2 percent for 2020.\n- 2020 \"will be remembered as the most severe contraction in generations.\"\n- 2021 projection: 6.9 percent growth for the region.\n- Despite the 2021 rebound, \"a number of economies will still be smaller in the end of 2021, than before the pandemic.\"\n- Economic scarring: projections suggest potential output by the middle of this decade could be some 5 percent lower than before the pandemic."
    },
    {
      "heading": "Key country outcomes highlighted",
      "content": "- India:\n  - Second quarter national accounts: economy shrank by an unprecedented 24 percent year-on-year in Q2.\n  - Projected contraction of 10.3 percent this fiscal year.\n- China:\n  - Suffered the pandemic earlier and has seen a strong recovery.\n  - Growth revised up to 1.9 percent for 2020.\n  - In the first three quarters, China grew 0.7 percent from a year ago (as noted in Q&A).\n  - China’s near-term rebound is generating positive spillovers for the region, especially via commodity prices and global value chains; much of China’s export boost has been in medical equipment and home electronics.\n- Cambodia:\n  - IMF revised projection to minus 2.8 percent for 2020 (noted in Q&A).\n  - Projected rebound to 5.6 percent in 2021.\n  - Key near-term drags: collapse in tourism and order cancellations affecting garment exports.\n- Nepal:\n  - Fund projected 2.5 percent growth in the current Fiscal Year (question context).\n  - Remittances are volatile and future flows depend on conditions in source countries (India, Malaysia, GCC).\n- Fiji and Pacific Islands:\n  - Among the hardest hit in the region, mainly because of dependence on tourism which has effectively halted.\n  - Recovery speed uncertain; likely a longer ascent given limited diversification and remoteness.\n- Japan:\n  - Olympic-related infrastructure largely completed; delayed or scaled-back Olympics likely to have a quantitatively small effect on aggregate GDP.\n  - Policy priorities include sustaining health containment and measures to support incomes (monetary action, incomes policy, minimum/ administered wages)."
    },
    {
      "heading": "Three lessons from Asia’s pandemic experience",
      "content": "- Early public health response, when infection rates are low, appears essential to flatten the virus curve.\n- Relaxing containment measures only after the virus has been suppressed—and with complementary policies such as broad testing and contact tracing capacity—tends to be associated with better economic outcomes.\n- Fiscal support has been critical to reduce economic costs and underpin recovery; Asia’s share of announced stimulus is broadly in line with its weight in the global economy."
    },
    {
      "heading": "Four major challenges facing Asia",
      "content": "- Labor market damage:\n  - Labor markets hit hard, especially female and younger workers.\n  - Rising inequality predated the crisis; the pandemic hits those at the bottom harder.\n  - Large informal sectors and limited social safety nets impede support to the most vulnerable.\n  - Robotization may displace more lower-skilled workers, potentially increasing inequality and social unrest.\n- Geopolitical trade and technology tensions:\n  - Threaten Asia’s export-driven growth model.\n  - Further decoupling across global technology hubs would have serious implications for the region’s growth potential.\n- Private-sector leverage:\n  - Corporate and household sectors entered the crisis with high leverage; the crisis amplifies this vulnerability.\n  - Vigilance against emerging credit risks is essential.\n- Public debt burdens:\n  - Public debt is a concern for a number of emerging markets and low-income countries in the region; unsustainable public debt should be addressed proactively."
    },
    {
      "heading": "Policy messages and recommendations (five key messages)",
      "content": "- 1) Do not withdraw macroeconomic policy support prematurely: both fiscal and monetary policy should continue to support recovery.\n- 2) Better target fiscal support to protect the most vulnerable: youth, women, and informal workers; targeted support provides bigger bang for the buck given scarce fiscal space.\n- 3) Remain vigilant against emerging credit risks from corporates and households to protect financial institutions, particularly if downside growth risks materialize.\n- 4) Address unsustainable public debt proactively: history shows delays in addressing debt problems increase costs over time.\n- 5) Implement structural policies geared to the world of tomorrow: facilitate corporate restructuring and resource allocation toward sectors that will drive stronger medium-run inclusive, green growth."
    },
    {
      "heading": "Supply chains, uncertainty, and multilateral considerations",
      "content": "- The pandemic is reshaping global and regional supply chains amid \"maximum uncertainty.\"\n- Near-term private investment is weak due to uncertainty across pandemic, trade, geopolitics, and technology.\n- The region would benefit from multilaterally based, rules-based solutions for trade and technology to reduce uncertainty and support investment decisions and global value chain configuration."
    },
    {
      "heading": "Social outcomes and poverty",
      "content": "- The pandemic is likely to push very large numbers into extreme poverty, reversing gains made over many years; many additions may be in South Asia.\n- Growth pickup alone will not be sufficient to reverse increases in extreme poverty; targeted fiscal measures are urgently needed to reach those at risk.\n- Rising inequality—already present in Asia before the pandemic—could, if unchecked, undercut sustainable growth and raise social unrest risks."
    },
    {
      "heading": "Selected country-specific policy advice (summarized)",
      "content": "- Vietnam: early, bold, and proactive containment measures helped enable an earlier reopening and stronger rebound; continue proactive health responses and targeted support for the vulnerable.\n- Japan: sustain health measures, continue monetary efforts to underpin positive price-wage dynamics, and consider incomes policies alongside minimum and administered wage settings.\n- Cambodia: prioritize fiscal expenditure targeting the most vulnerable; recovery contingent on baseline global demand recovery for garments and some tourism return.\n- Nepal: prioritize flattening the curve, protect vulnerable groups, and monitor remittance sources closely.\n- Fiji/Pacific Islands: face steep recovery challenges due to tourism dependence, limited diversification, and remoteness; require tailored fiscal and financial support.\n- Philippines/Indonesia/India (and similar cases): no firm economic recovery foundation exists amid an uncontrolled pandemic—flattening the virus curve is a prerequisite for a sustained recovery.\n\nTranscript of Press Briefing on the October 2020 Asia Pacific Regional Economic Outlook, October 21, 2020, IMF Communications Department\n\n---\n\n\n References\n\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2020/10/21/tr102120-transcript-of-asia-pacific-regional-economic-outlook-press-briefing"
    }
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    "Published: October 21, 2020",
    "The Asia-Pacific region has been hit hard by the pandemic, with regional growth projected at -2.2 percent for 2020.",
    "2020 \"will be remembered as the most severe contraction in generations.\"",
    "2021 projection: 6.9 percent growth for the region.",
    "Despite the 2021 rebound, \"a number of economies will still be smaller in the end of 2021, than before the pandemic.\"",
    "Economic scarring: projections suggest potential output by the middle of this decade could be some 5 percent lower than before the pandemic.",
    "India:",
    "China:",
    "Cambodia:",
    "Nepal:",
    "Fiji and Pacific Islands:",
    "Japan:",
    "Early public health response, when infection rates are low, appears essential to flatten the virus curve.",
    "Relaxing containment measures only after the virus has been suppressed—and with complementary policies such as broad testing and contact tracing capacity—tends to be associated with better economic outcomes.",
    "Fiscal support has been critical to reduce economic costs and underpin recovery; Asia’s share of announced stimulus is broadly in line with its weight in the global economy.",
    "Labor market damage:",
    "Geopolitical trade and technology tensions:",
    "Private-sector leverage:",
    "Public debt burdens:",
    "1) Do not withdraw macroeconomic policy support prematurely: both fiscal and monetary policy should continue to support recovery.",
    "2) Better target fiscal support to protect the most vulnerable: youth, women, and informal workers; targeted support provides bigger bang for the buck given scarce fiscal space.",
    "3) Remain vigilant against emerging credit risks from corporates and households to protect financial institutions, particularly if downside growth risks materialize.",
    "4) Address unsustainable public debt proactively: history shows delays in addressing debt problems increase costs over time.",
    "5) Implement structural policies geared to the world of tomorrow: facilitate corporate restructuring and resource allocation toward sectors that will drive stronger medium-run inclusive, green growth.",
    "The pandemic is reshaping global and regional supply chains amid \"maximum uncertainty.\"",
    "Near-term private investment is weak due to uncertainty across pandemic, trade, geopolitics, and technology.",
    "The region would benefit from multilaterally based, rules-based solutions for trade and technology to reduce uncertainty and support investment decisions and global value chain configuration.",
    "The pandemic is likely to push very large numbers into extreme poverty, reversing gains made over many years; many additions may be in South Asia.",
    "Growth pickup alone will not be sufficient to reverse increases in extreme poverty; targeted fiscal measures are urgently needed to reach those at risk.",
    "Rising inequality—already present in Asia before the pandemic—could, if unchecked, undercut sustainable growth and raise social unrest risks.",
    "Vietnam: early, bold, and proactive containment measures helped enable an earlier reopening and stronger rebound; continue proactive health responses and targeted support for the vulnerable.",
    "Japan: sustain health measures, continue monetary efforts to underpin positive price-wage dynamics, and consider incomes policies alongside minimum and administered wage settings.",
    "Cambodia: prioritize fiscal expenditure targeting the most vulnerable; recovery contingent on baseline global demand recovery for garments and some tourism return.",
    "Nepal: prioritize flattening the curve, protect vulnerable groups, and monitor remittance sources closely.",
    "Fiji/Pacific Islands: face steep recovery challenges due to tourism dependence, limited diversification, and remoteness; require tailored fiscal and financial support.",
    "Philippines/Indonesia/India (and similar cases): no firm economic recovery foundation exists amid an uncontrolled pandemic—flattening the virus curve is a prerequisite for a sustained recovery.",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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