PECC State of the Region Report 2021-2022

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The Caveat that this was based on business sentiment prior to Russia/Ukraine conflict erupted in Feb of 2022, but still covers some interesting trends, initiatives and actions which remain relevant and even more urgent given this event, inflationary woes and ongoing supply chain disruption.

A key takeaway from this report is that the regional policy community is optimistic about the prospects for growth over the next 12 months which may well now be tempered given the sudden shock of a geopolitical war event taking place in the western world. We have not seen these levels of optimism in Asia Pacific among our survey panellists since the recovery from the Global Financial Crisis. This is in spite of the ongoing Covid-19 pandemic and the emergence of new variants of the virus which was by far the top risk to growth in our survey. In PBEC’s view it now very much depends on the sector you talk too.

While there are many downside risks to the outlook, some perspective is needed. At this point in time last year vaccines were only on trial, estimates of global manufacturing capacity was between 2-4 billion doses and the forecast was that global economy would grow by 5.1 percent this year. To date more than 6 billion vaccine doses have been delivered and the global economy is expected to grow by about 5.9 percent this year.

What has been somewhat of shock has been the emergence of inflationary pressures in some regional economies. This may be a result of the faster than expected recovery in some economies, supply-demand mismatches, and the surge in the cost of international transportation. Central banks are carefully watching this issue with some already raising interest rates. However, given that many economies are recovering much more slowly than others it is a situation that needs to be watched carefully.

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