The Asia-Pacific region is tipped to become the fastest growing in terms of GDP growth in the world in the year ahead, according to analyst firm GlobalData.
The roll-out of vaccines, revival of global demand, effectiveness of government spending and oil prices gaining traction have all boosted the recent rebound, GlobalData reported.
But fewer lockdown restrictions, a rebound in domestic consumption and an uptick in export demand in the APAC region are expected to power its lead over the Americas, Europe and the Middle East and Africa.
Gargi Rao, economic research analyst at GlobalData commented: “The collapse of oil prices and increasing COVID-19 cases has hurt all the global economies. Europe witnessed a steep contraction in real GDP growth by 7.16 per cent in 2020, followed by the MEA region (-5.23 per cent) and the Americas (-5.16 per cent).
“The APAC region saw a slow contraction of -2.12 per cent last year, with China witnessing positive growth amid the pandemic.”
Fiscal policy, along with the distribution of vaccines are expected to be the main drivers of growth recovery in 2021.
The Americas are projected to rebound with 4.7 per cent growth, backed by rising oil prices, whereas Europe and the MEA will grow by 4.46 per cent and 3.66 per cent, during the year.
Meanwhile the purchasing managers’ index (PMI) for manufacturing in the APAC region has seen an uptick since the closing months in 2020, Ms Rao said, indicating a “sharp recovery in business activities and production.
“The expected progressive rollout of COVID-19 vaccines will help countries contain the spread of the disease and economic activities to rebound in 2021,” he commented.
“In addition, the rebound in growth of major APAC countries such as India and China will create further opportunities for trade and spur growth.”
Meanwhile the Americas is expected to see growth in manufacturing and the services sector, as well as an increase in business activities and online retail trade.
Growth in Europe is predicted to be boosted by political agreements on recovery and resilience funding, while the MEA and Americas regions are expected to benefit from the rise in crude oil prices.
“The outlook for all regions remains clouded by geopolitical tensions, resurgence of COVID-19 cases and volatility in oil prices,” Ms Rao warned.
“However, the strength of the recovery varies across regions as it depends on effectiveness of vaccine rollouts, implementation of fiscal stimulus packages, exposure to cross-country spillovers and structural characteristics of the countries.
“The policy actions need to provide effective support to revive the global demand and tap export opportunities to spur growth in 2021 and beyond.”
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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