Is this the right time to invest in Asia?

It’s been about two years since then The coronavirus pandemic has begun to invade everything. However, we still cannot talk about a full recovery, specifically in the Asian region.

In the latter case, the unfortunate situation could be due to the adoption of the so-called zero tolerance policy Against Covid-19, which is resorting to lockdown to combat the slightest regrowth. The question then arises is whether living with the virus Can contribute to the recovery of the economy Area.

According to virologists, Covid-19 is endemic, which means that It will continue to spread among us for years. Therefore, the world has to learn to live with it, because eradication is currently impossible.

Similarly, the study temper nature He points out that the future will largely depend on what kind of immunity people acquire through infection or vaccination and how the virus develops. It is believed that in areas that have zero tolerance for Covid-19 There will be a constant risk of disease outbreaks.

On the other hand, we are talking about human life. Moving to a “live with the virus” strategy in China, for example, could mean hundreds of thousands – if not millions – of fatal cases. Thus, the authorities are faced with a difficult choice: Save human lives or help the economy.

The most important country in the Asian region is constantly facing attacks from Western governments

So far, the vast majority of Asian countries have chosen the first option and appear to have been better at controlling the virus than the United Kingdom and the United States. However, in terms of economic outlook, the Asia-Pacific region is expected to continue to underperform United States of America and Europe.

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To be more precise, S&P Global Ratings recently lowered its growth forecast from China to 4.9% in 2022, from 5.1% previously, and lowered its 2023 growth forecast to 4.9% from the previous 5%. South Asia is expected to grow by 8.6% in 2021, compared to the September forecast of 8.8%.

it is expected that Improving vaccination coverage in the region And economic re-opening continues to gain momentum, helping the economy recover. The only problem is that in addition to the risks of the epidemic, the largest country in the Asian region – China – is constantly facing attacks from Western governments.

Specifically, the European Union recently announced that Impose additional tariffs on aluminum foil of the Asian giant. The rationale is that producers benefit from Excessive and unfair subsidies.

How will this affect economic growth in the region? Only time will tell, but it seems that People’s Bank of China Once again he will have to loosen his monetary policy.

*** Igor Kuchma Analyst at Trading View

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