Asia: Shut that door! 

The relatively mild pandemics experienced by much of Asia (India excluded) have not delivered the economic dividend you might have anticipated. This is mainly because the authorities' reaction functions in Asia have been quite different to those in the West.

Where a few thousand daily cases of Covid, most of them asymptomatic, would be a green light to re-opening economies in most European countries and American states, in Asia, it is cause for aggressive and in many cases protracted lockdowns.

Coupled with the very weak vaccine rollouts across most of the region, as you can see in the chart below, the last month has seen Asia bucking the global trend towards reducing its daily infection count, as well as bucking the trend towards economic re-opening.

The increase in daily cases in Asia is still comparatively small, though they are increasingly of the "new" delta virus variant. Sentiment in the region may well have been affected by the harrowing images of mass funeral pyres in India. In any event, small increases in daily case counts have often led to substantial additional restrictions to movements.

We've outlined the current state of play for countries in our region in the table below. Whether you view these as disproportionate or not, the recent lesson from India is that you can move from a situation of "under control" to "catastrophe" in about four weeks. So some caution is certainly warranted.

As we have highlighted elsewhere, it is the restrictions on movement that do most of the damage to economies, and recent increases and extensions in such restrictions have led us to trim many of our growth forecasts.

India has seen the biggest cut to our GDP forecasts for 2021, but we have also cut our forecasts for Japan, Thailand, Taiwan and the Philippines. A number of other economies are under review for GDP downgrades (Malaysia, Singapore) and what we do here will depend on whether current measures are eased, or extended/tightened.

Elsewhere, where the news on the economy and on Covid has been better (Korea, Australia) we are holding back some of the upgrades we would ordinarily have put in place, at least until vaccine rollouts have progressed further and the risk of a new Covid wave has retreated. However, these economies are the exception rather than the rule.

Please see the separate article by Iris Pang for comments on China. But she will not mind me saying that if the recent increase in cases of the delta variant in Guangdong become more widespread, and China's response to this is expanded, then the impact on the rest of Asia's exports, which have benefited substantially from China's relative domestic strength, will result in us having to do much more than just trim our other Asian GDP forecasts.