Asia-Pacific economies are likely to prove resilient to continuing Covid-19 outbreaks, due to limited lockdowns and increased export demand from the US and EU, a Deutsche Bank report released on Monday said.

Although many countries in the region are experiencing relatively high Covid-19 daily infections and vaccination rates are generally still low compared with developed markets, the bank noted their economies are still less affected than last year.

“Many of the current lockdown measures are very targeted and localised,” said the Deutsche Bank researchers, led by Jason Liu, Asia-Pacific head of the bank’s chief investment office. 

“Most emerging market Asian countries are export-oriented and are therefore ready to benefit from further recoveries in external demand,” they added.

The Deutsche Bank team said its gross domestic product forecast for China remained at 8.7 per cent for this year and 5.5 per cent in 2022. “We believe that the Chinese economy will remain supported by export growth and improving consumption.”

China’s GDP growth was 12.7 per cent year-on-year in the first half of the year. 

“We have seen uneven recovery in different sectors of the economy,” the bank wrote. “Consumption growth has lagged behind expectations recently. Some Chinese cities saw a few outbreaks in June, which affected consumption in the month.”

Deutsche Bank noted that India is recovering from a severe second Covid-19 wave. 

Daily new cases have dropped below 40,000 – a three-month low from a high of 10 times as many last month. “Recent lockdowns have been shorter, localised and less stringent,” the bank noted.

But while the pace of vaccinations has picked up recently, only about 10 per cent of India’s eligible population has so far been fully vaccinated.

For south-east Asia, Liu and his team said the key to economic recovery will be vaccination rates. Only Singapore has been able to vaccinate its population at a rate comparable to developing countries. 

Indonesia and Malaysia have vaccinated about 13 per cent and 24 per cent with at least one dose, respectively. 

Deutsche Bank said the region could no longer count on exports of personal protective equipment. “Demand for PPE will be less pronounced as economies globally slowly return to normality.”

However, there would be continued demand for “electronics, software equipment and semiconductors, as US and European consumers in particular start to spend their built up savings”, Deutsche Bank said.