The damage from the COVID-19 pandemic to economies in the Asia-Pacific region could reach US$2 trillion through next year, S&P Global Ratings said on Friday, as the coronavirus persists and the recovery of business conditions to pre-pandemic levels looks some way off.
The implementation of social distancing and other containment measures would continue in a bid to mitigate the effects of the outbreak until an effective vaccine is developed, but such practices will likely cause income losses for households and businesses, it said.
“As the COVID-19 pandemic endures, we are learning more about its human, economic and financial costs,” S&P Global Ratings Asia-Pacific chief economist Shaun Roache said in a statement. “The next lesson will be about the cost of transition between lockdown and vaccine.”
Photo: Chen Hsin-yu, Taipei Times
Economies in the region would enter a transition period until the middle of next year, during which social distancing measures would pervade in everyday life, although such constraints might differ by country and could be relaxed or tightened from time to time depending on the epidemic situation, the ratings agency said.
“Economic policies can limit some of the damage during first-wave containment, support the partial recovery through transition, and provide a bridge to the self-sustaining recovery that takes hold in late 2021. However, the costs continue to compound,” it added.
Based on S&P’s estimate, economic growth across the region would slow to 0.3 percent this year, which compares with 4.8 percent growth the agency forecast prior to the pandemic and marks the lowest since the 1.3 percent growth during the Asian financial crisis in 1997.
The IMF last week said that economic growth in the region will likely slow to a standstill this year, which has not happened in the past 60 years.
S&P said that Taiwan’s economy would shrink by 1.2 percent this year, down from its previous estimate of 1.9 percent expansion.
The ratings agency said it expects China’s economy to grow 1.2 percent, down from the 2.9 percent growth it projected earlier.
The agency cut its growth forecast for India from 3.5 percent to 1.8 percent and expects Japan’s economy to contract by 3.6 percent, compared with a decline of 1.2 percent it predicted earlier.
Governments in the region are facing imminent challenges, such as unemployment, from the pandemic, which would cause consumers to become more frugal, increase pressure on more leveraged households and take a toll on the broader economy, S&P said.
“From an economics perspective, the main risk now is unemployment,” Roache said. “Jobs are easily lost, but hard to win back and a surge in unemployment, say by more than 4 percentage points across the region, would mean a much flatter recovery path.”
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six