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In financial markets, in my opinion, it has been realistic for a few months to consider the time after Covid-19. Much would still depend on how individual countries continue to be affected by the coronavirus pandemic or, conversely, how well they manage to keep it under control until a vaccine is put in place. Based on the latest updates from some of the major drug companies, more vaccines will most likely be released in the middle of the first quarter of next year. In my opinion, this is reasonably in line with expectations that are being traded on the stock markets. If these expectations are met, I can imagine that the world would start to breathe a sigh of relief in mid-2021.
However, in certain parts of the world, people are already in a post-Covid-19 crisis period.
Many countries in Africa have done well amid the pandemic, but the continent only accounts for about 3 percent of global GDP. Therefore, Africa cannot save world GDP growth. But for a long time, China’s economy was expected to advance very rapidly again. After all, China accounts for about 15 percent of global GDP, so the return of growth to its economy is at least important in Asia, especially the Far East.
This also helped German automaker BMW, which, for the third quarter, posted historically high quarterly turnover. Car sales in the Chinese market soared with a 31 percent increase, compared to the third quarter of 2019. Of course, the increase is caused by many buyers who postponed buying until after the Covid-19 crisis. , so the situation is now largely considered. “Post-crisis” in China. Consumers have also returned to restaurants, and it is possible to go out again in Wuhan since May, but the atmosphere has been subdued. From what I heard, only lately has life in cafes, bars and restaurants become more relaxed.
China’s economy returning to a faster gear is also reflected in its imports, which have increased since May and significantly in September. There have been signs that this surge in economic activity has also been felt by China’s neighbors, where a notable example emerged this week.
On November 4, the Philippines announced its September trade data and it contains bright spots. The annual change in exports from the Philippines had a big decline in March, when Covid-19 began to shake the world. By contrast, exports found a relatively quick return path, albeit still with negative annual growth rates compared to 2019. Exports in August were cause for concern as the negative annual trend gained momentum again, but In September, exports showed a positive increase from the same month of the previous year. It is worth mentioning that the large increase at the end of 2019 has a technical explanation, since it was related to the negative evolution in the fall of 2018 (a decrease due to the trade war between the US and China).
It is clear that the export growth in the Chinese market (combined with Hong Kong) is leaving a big mark on the export statistics. About two years ago, there was a time when the European Union was the main export destination for Filipino products, but China has taken that position, and I have long considered when the current progress in China in economic growth would be noticed among its neighbors. . Trade data for September is one example, and progress is mainly in sectors where Philippine companies are subcontractors to Chinese factories, such as the production of components for the electronics industry.
These are bright spots for the Philippine economy, and signs of a way out of the economic crisis after Covid-19 show a difficult, long, and difficult one, but other areas of the Philippine economy are also moving forward. Blockades in the country have varied from province to province, and Manila has been particularly affected. But here too, normal life is making a comeback, with restaurants welcoming customers back and bars that only close at midnight.
Of course, the overall progress in Asia is fragile, and if the countries in the region are hit by a new Covid-19 wave, then of course it will spell a setback for them. That risk will be there until vaccines are widely available, but the trade figures mentioned above are another example of Asian economies now beginning to take the hard road out of the crisis, which is obviously interesting to investors.
Peter Lundgreen is the founding CEO of Lundgreen’s Capital. He is a professional investment advisor with over 30 years of experience and a powerful investment and finance entrepreneur. He is also an international columnist and speaker on topics related to global financial markets.
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