MANILA, Philippines — The country’s export sector is expected to hit a speed bump as China, the world’s second largest economy, has reimposed stringent measures to address COVID cases.
In its latest short-term economic forecast, the Japan Center for Economic Research (JCER) said exports of the ASEAN-4 – Indonesia, Malaysia, Thailand and the Philippines – would be impacted by the latest developments in China.
“ASEAN-4’s exports will fall in the second quarter and their recovery will be modest in the third quarter,” JCER said.
“In these quarters, the exports will receive downward pressures from China’s economic slowdown and distortions in international trade and specialization, both of which will be caused by China’s restrictive measures against COVID,” it said.
Latest data showed exports increased by just six percent to $6.13 billion in April. The latest figure is a three-month low in terms of outbound shipments.
It should be noted that China was the top export destination with $972 million or 15.9 percent of total exports for the month.
China has reimposed stringent measures that may slow the recovery of many economies, including the Philippines, as China is a top market for ASEAN-4.
Right now, China has a zero COVID policy, which means that its borders are still largely closed.
“China’s economy will slow sharply in the second quarter due to harsh lockdown measures implemented in major cities in response to the spread of COVID,” JCER said.
“Although these measures will be relaxed gradually, the rebound of private demand will be curbed, assuming that some restrictive measures will remain by the end of September,” it said.
Nonetheless, the Tokyo-based think tank emphasized that private consumption in ASEAN-4 is expected to remain robust as people’s mobility improves with the relaxation of COVID restrictions in their own countries.