ECONOMIC OUTLOOK FOR SOUTHEAST ASIA, CHINA AND INDIA 2021 reallocating resources for... digitalisation.

Foreword Acknowledgements Table of contents Figures Figure 1. Stringency of COVID-19-related restrictions in Emerging Asian economies Figure 2. Contribution by demand and supply-side components to real GDP growth in ASEAN-5 economies, 2018-20 Figure 3. Private consumption behaviour in the aftermath of selected natural disasters in Thailand and the Philippines Figure 4. Change in benchmark stock price indices and spreads to 10-year US Treasuries of selected Emerging Asian economies, 2020-21 Figure 5. Level and change in private and public sector debt in selected Emerging Asian economies, 2020 Figure 6. Total exports of selected ASEAN economies by destination, Q1-Q2 2020 Figure 7. Changes in unemployment around recession periods in selected ASEAN economies, 1991-2020 Figure 8. Increasing e-commerce penetration and average revenue per user, 2019-20 Figure 9. Monetary policy actions in selected Emerging Asian economies, 2020 Figure 10. Average impact of the AFC and GFC on the natural rates of interest of Indonesia and Thailand Figure 11. Total amount of fiscal packages and estimated impact on the fiscal balance of selected ASEAN economies Figure 12. Sovereign debt maturity profile and government debt held by external creditors in selected Emerging Asian economies Figure 13. Daily active users of telemedicine platforms in Indonesia and Singapore, March 2020 Figure 14. Interest in telehealth and cumulative confirmed cases of COVID-19 in selected ASEAN economies, February-November 2020 Figure 15. Internet usage by level of education and income in selected Emerging Asian economies, 2019 Figure 16. School closure policies in Emerging Asia, January to November 2020 Figure 17. Global mobile education app downloads, Q1 2017 to Q1 2020 Figure 18. Keyword search trends related to selected national learning platforms, 2020 Figure 19. Fixed broadband subscriptions and speed in selected Emerging Asian economies Figure 20. Annual installations of industrial robots and robot density, 2019 Figure 1.1. Real GDP growth of Southeast Asia, China and India Figure 1.2. Impact of large natural disasters on GDP growthin the Philippines and Thailand Figure 1.3. Stringency of COVID-19-related restrictions in Emerging Asian economies Figure 1.4. Cumulative confirmed cases of COVID-19 in Emerging Asia Figure 1.5. Contribution to GDP growth in Indonesia, 2018-20 Figure 1.6. Contribution to services growth in Indonesia, 2019-20 Figure 1.7. Consumer confidence indices in Indonesia, Malaysia, Philippines and Thailand Figure 1.8. Projected gains from CPTPP and RCEP versus gains/losses from US-China trade conflict of selected signatory countries Figure 1.9. Contribution to GDP growth in Malaysia, 2018-20 Figure 1.10. Contribution to services growth in Malaysia, 2019-20 Figure 1.11. Industrial production index in Malaysia and Viet Nam, 2017-20 Figure 1.12. Breakdown by holder sector of securities issued by the Malaysian government Figure 1.13. Contribution to GDP growth in the Philippines, 2018-20 Figure 1.14. Manufacturing and services in selected ASEAN economies, 2016-20 Figure 1.15. Contribution to GDP growth in Thailand, 2018-20 Figure 1.16. Contribution to total export growth in Thailand, 2020 Figure 1.17. Contribution to GDP growth in Viet Nam, 2018-20 Figure 1.18. Contribution to industrial sector growth in Viet Nam, 2019-20 Figure 1.19. Contribution to GDP growth in Brunei Darussalam, 2018-20 Figure 1.20. Contribution to industrial sector growth in Brunei Darussalam, 2019-20 Figure 1.21. Contribution to GDP growth in Singapore, 2018-20 Figure 1.22. Contribution to services growth in Singapore, 2019-20 Figure 1.23. Green bond issuance by new issuers in selected ASEAN economies, January-August 2020 Figure 1.24. Contribution to GDP growth in Cambodia, 2017-19 Figure 1.25. Contribution to growth in tourist arrivals in Cambodia, January-October 2020 Figure 1.26. Contribution to GDP growth in Lao PDR, 2017-19 Figure 1.27. Consumer price index for food and exchange rate against US dollar in Lao PDR, 2019-20 Figure 1.28. Contribution to GDP growth in Myanmar, 2017-19 Figure 1.29. Contribution to GDP growth in China, 2018-20 Figure 1.30. Contribution to export growth in China, March-November 2020 Figure 1.31. Contribution to GDP growth in India, 2018-20 Figure 1.32. Change in benchmark stock price indices and price-to-earnings (P/E) ratios in Emerging Asian countries Figure 1.33. Sovereign yield curve and spreads in selected Emerging Asian economies, 2020-21 Figure 1.34. Spread between three-month interbank rates and three-month sovereign yields in selected Emerging Asian economies, January-December 2020 Figure 1.35. Level and change in private and public sector debt in selected Emerging Asian economies, 2020 Figure 1.36. Capital Adequacy Ratio (CAR) Tier-1, return on equity (ROE), NPL ratio levels and growth of gross NPLs in selected Emerging Asian economies, 2020 Figure 1.37. Current account balances in Emerging Asia, 2020-21 Figure 1.38. Change in current account balance, trade balance and visitor arrivals in selected Emerging Asian economies Figure 1.39. Foreign direct investment in Emerging Asia, 2018-20 Figure 1.40. Current account balance, Nominal Effective Exchange Rate (NEER) and official reserves of selected Emerging Asian economies Figure 1.41. Total exports of selected ASEAN economies by destination, Q1-Q2 2020 Figure 1.42. Export growth by commodity group in selected ASEAN economies, March-October 2020 Figure 1.43. Contribution to headline inflation in selected ASEAN economies, March-November 2020 Figure 1.44. Producer price inflation in selected ASEAN economies, 2019-20 Figure 1.45. Unemployment rate in selected Emerging Asian economies Figure 1.46. Change in unemployment by age group in Malaysia and Thailand, 2019-20 Figure 1.47. Changes in unemployment around recession periods in selected ASEAN economies, 1991-2020 Figure 1.48. Private consumption behaviour in the aftermath of selected natural disasters in the Philippines and Thailand Figure 1.49. Projected e-commerce revenue in Emerging Asia, 2015-24 Figure 1.50. ASEAN e-commerce revenue and users by country, 2019 Figure 1.51. Increasing e-commerce penetration and average revenue per user, 2019-20 Figure 1.52. Cross-border e-commerce in China and India Figure 1.53. Forms of payment used in selected Emerging Asian countries Figure 1.54. Monetary policy actions in selected Emerging Asian economies, 2020 Figure 1.55. Central bank government bond purchases, 10-year sovereign yields and exchange rates in Indonesia and Thailand, 2020 Figure 1.56. Total assets held by the central banks of Indonesia, the Philippines and India, 2017-20 Figure 1.57. Headline inflation and target inflation range in inflation-targeting Emerging Asian countries Figure 1.58. Natural rates of interest of Indonesia and Thailand Figure 1.59. Average impact of the AFC and GFC on the natural rates of interest of Indonesia and Thailand Figure 1.60. Total amount of fiscal packages and estimated impact on the fiscal balance of selected ASEAN economies Figure 1.61. Population covered by social protection, contribution of SMEs to domestic GDP and size of fiscal stimulus in selected Emerging Asian economies Figure 1.62. Government debt and budget deficits in ASEAN countries, 2019-20 Figure 1.63. Sovereign debt maturity profile and government debt held by external creditors in selected Emerging Asian economies Figure 1.64. Sovereign CDS spreads in selected Emerging Asian economies, 2008-20 Figure 1.65. Breakdown of governments’ financial assets in Indonesia and Thailand, 2016-19 Figure 2.1. Number of requested Medicare items processed for GP attendances in Australia Figure 2.2. UHC service coverage index, 2017 Figure 2.3. Daily active users of telemedicine platforms in Indonesia and Singapore Figure 2.4. Interest in telehealth and cumulative confirmed cases of COVID-19 in selected ASEAN economies, February-November 2020 Figure 2.5. Malaysian residents are wary of digital health tools Figure 2.6. Openness to telehealth services increases in India Figure 2.7. Digital Health Index for selected ASEAN countries Figure 2.8. Internet usage by level of education and income in selected Emerging Asian economies, 2019 Figure 2.9. School closure policies in Emerging Asian economies, January to November 2020 Figure 2.10. Global 7-day rolling average of students out of school due to COVID-19 closures Figure 2.11. Global mobile education app downloads, Q1 2017 to Q1 2020 Figure 2.12. Keyword search trends related to selected national learning platforms, 2020 Figure 2.13. Fixed broadband subscriptions and speed in selected Emerging Asian economies Figure 2.14. Disparity among Indonesian provinces in the ICT Development Index, 2016 Figure 2.15. Awareness of Fintech services by household income group in Viet Nam, 2019 Figure 2.16. Households with home Internet access in selected Emerging Asian economies Figure 2.17. Estimates of home-based work probabilities by sub-region, 2020 Figure 2.18. Annual installations of industrial robots and robot density, 2019 Figure 2.19. BPO sector in the Philippines, 2016 Figure 2.20. Distribution of tertiary graduates by field of study, Thailand Figure 2.21. ICT goods exports, Viet Nam 2007-17 Figure 2.22. Network coverage in CLM countries, 2020 Figure 2.23. Population with access to electricity in Emerging Asian economies, 2018 Figure 2.24. Number of ransomware cases reported to CSA, 2016 - October 2020 Tables Table 1. Real GDP growth in ASEAN, China and India, 2019-21 Table 2. Examples of Industry 4.0 initiatives in Emerging Asia Table 3. Initiatives to support digitalisation during COVID-19 Table 4. Country-specific challenges for Industry 4.0 in Emerging Asia Table 1.1. Real GDP growth in ASEAN, China and India, 2019-21 Table 1.2. Quarterly real GDP growth in ASEAN, China and India, 2019-20 Table 1.3. Goods sold on line in Emerging Asia, 2019 Table 1.4. E-commerce revenue, year-on-year changes 2019-20 Table 1.5. Priority groups for COVID-19 vaccination in Indonesia Table 1.6. Vaccine rollout strategy in the Philippines Table 1.7. Overview of inflation-targeting regimes in Emerging Asia Table 1.8. Examples of fiscal stimulus measures in Emerging Asia in response to the COVID-19 pandemic Table 2.1. Examples of government-led initiatives in Emerging Asia to develop digital health tools during COVID-19 Table 2.2. Status of telemedicine regulation in Emerging Asian economies Table 2.3. Primary and secondary educational responses to COVID-19 in Emerging Asia Table 2.4. Public health measures have kept students out of school Table 2.5. Examples of approaches towards digitalising TVET in selected Emerging Asian economies Table 2.6. Examples of Industry 4.0 initiatives in Emerging Asia Table 2.7. Initiatives to support digitalisation during COVID-19 Table 2.8. Country-specific challenges for Industry 4.0 in Emerging Asia Table 2.9. Barriers to technology adoption across manufacturing firms in Indonesia Table A.1. Real GDP growth in ASEAN, China and India, 2019-21 Table A.2. Current account balances of ASEAN, China and India, 2019-21 Table A.3. General government fiscal balances of ASEAN, China and India, 2019-21 Boxes Box 1. Changes in consumer behaviour in times of large external shocks:Evidence from natural disasters Box 1.1. Measuring the economic impact of COVID-19: Growth resilience to large external shocks Box 1.2. Regional agreements could accelerate economic recovery in Asia Box 1.3. Singapore aims to become green finance hub in Asia Box 1.4. Liquidity risks and debt-oriented funds in India Box 1.5. Consumer behaviour in times of large external shocks: Evidence from natural disasters Box 1.6. The natural rates of interest in Emerging Asian countries Box 1.7. Fiscal multipliers in Emerging Asian countries Box 1.8. ASEAN Comprehensive Recovery Framework (ACRF) lays the foundation for a sustainable recovery in the region Box 2.1. Adapting to telemedicine: The case of Australia Box 2.2. Universal health coverage in Emerging Asia Box 2.3. Attitudes towards digital health in Malaysia Box 2.4. India’s eSanjeevani initiative takes off during the pandemic Box 2.5. Rise in ransomware incidents in Singapore Acronyms and abbreviations Executive summary Overview Macroeconomic assessment and economic outlook Maximising the use of digital health tools to cope with pandemics Upgrading digital skills to facilitate online education Accelerating Industry 4.0 in the post-COVID-19 era References Chapter 1: Macroeconomic assessment and economic outlook in Emerging Asia Introduction Overview and main findings Recent developments and near-term outlook Financial markets have stabilised, but vulnerabilities persist Pressure on bank balance sheets could intensify Current account imbalances will widen as trade and tourism take time to recover Rebound in Chinese economy benefits ASEAN exports Inflationary pressures remain low due to ongoing slack in the economy Labour markets suffer biggest blow in decades due to health crisis Digital transactions in Emerging Asia surpass expectations Risks to growth and policy challenges in light of COVID-19 Conclusion Note References Chapter 2: Reallocating resources for digitalisation in response to COVID-19: Health, education and Industry 4.0 Introduction Digital health tools are helping the response to the pandemic Online education in Emerging Asia requires an upgrade in digital skills Accelerating Industry 4.0 in the post-COVID-19 era Conclusion Notes References Annex A. Statistical annex