SUMMER 2022 NO.65 / THOUGHT LEADERSHIP BRIEF 2 ECONOMIC PERFORMANCE THROUGH COVID In general, Asian economies have performed well through COVID in terms of GDP outcomes. GDP for the year to Q4 2021 was meaningfully higher than for the year to Q4 2019 across multiple Asian economies. In particular, Asian economies like Vietnam, China, Taiwan, Singapore, South Korea, and Australia and New Zealand have generated strong economic performance through the pandemic. This GDP performance has out-paced the US, which was by far the strongest performing of the G7 economies, as well as many large European economies where GDP levels that have not yet recovered to pre-COVID levels. There are several reasons for this relatively strong Asian performance. The tight restrictions that controlled the spread of COVID in many Asian economies, allowed for the rapid re-opening of domestic economies from mid-2020. This allowed for stronger private consumption and investment activity in many Asian economies. Figure 1. Real GDP (Rolling 12 Monthly), Q4 2021, Q4 2019 = 100 Figure 2. Exports of Goods (Rolling 3 Monthly), Current Prices, Local Currency, January 2020 = 100 140 130 120 110 100 90 80 Vietnam China Taiwan New Zealand Singapore South Korea Australia United States Indonesia India Brunei Hong Kong EU 27 United Kingdom Malaysia Japan Philippines Thailand 160 150 140 130 120 110 100 90 80 70 60 Jan Jan Jan Apr Apr Jul 2020 Jul 2021 Oct Oct 2022 India Vietnam China Taiwan South Korea Japan Malaysia Thailand Source: Macrobond; National sources; Landfall Strategy Group calculations Source: Macrobond; National sources; Landfall Strategy Group calculations In addition, resilient external demand was an important supporting factor. Export growth made a strong contribution to GDP growth. This contribution has occurred despite the collapse in international tourism revenues, to which many Asian economies are exposed. But strong growth in merchandise trade has more than offset this reduction in services exports. The Asian economies that have generated strong GDP growth have also experienced robust rates of export growth. Exports in several leading Asian economies, such as China, South Korea, Japan, Taiwan, Singapore, are 30-40% higher in February 2022 than in January 2020. This export growth, in the context of high exports/GDP ratios in these Asian economies, has supported strong GDP growth rates. Asian economies with export-oriented growth models have done well. Vietnam provides a good example. Exports contracted only slightly in Q2 2020 before recovering strongly. It has an export share of ~80% of GDP. This combination is a core part of the explanation for Vietnam’s very strong economic performance through the pandemic.
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