Moody’s blames Thailand’s tepid recovery on slow vaccination rollout

Rebound will also be tepid for economies that are also dependent on foreign tourists, like Thailand. Moody’s expects Thailand’s GDP to expand 2.8 per cent this year, a relatively shallow pickup from 6.1 contraction in 2020 due to a lagging recovery in the tourism industry.

However, it said, recovering global trade will support the region’s more export-oriented economies.

"Fresh restrictions to stem the spread of the virus will curb domestic demand and dampen consumer confidence. Vaccination rates are low in most parts of Apac, with only Maldives, Mongolia, Singapore and China having administered a first vaccine dose to at least 4 per cent of their populations," said Nishad Majmudar, a Moody's assistant vice president and analyst.

However, for economies that are more export-oriented like Vietnam, Taiwan and Malaysia, large contributions from foreign trade will compensate for weak domestic demand and bolster output.

Vietnam's robust exports have helped its economy grow amid the pandemic; exports expanded 8 per cent in the first quarter compared to the last quarter of 2020. Likewise, Taiwan exports grew 8 per cent in the first quarter, powering an 8.9 per cent surge in GDP. Malaysia's diverse export destinations and products should help mitigate the impact of the extension of its national lockdown through the end of June. Moody's forecasts growth of 7.2 per cent, 4.2 per cent and 5.3 per cent, respectively, for these economies.

The report, "Sovereigns – Asia Pacific: Lagging Vaccinations Pose Risks to Domestic Demand; Exports Provide Buffer for Some", can be accessed via the website.