Asia-Pacific countries have deepened their regional integration during the pandemic, which has helped isolate their economies, as supply chain bottlenecks and restrictions to curb the virus have stifled trade elsewhere. .
Intra-regional trade rose more than 31% in the first three quarters of 2021, after contracting 3% in the same period a year earlier, according to a report released Wednesday by the Asian Development Bank. Trade in Asia accounted for 58.5% of the region’s total trade in 2020, its highest share in three decades.
Successful containment of the virus and rapid vaccination in major Asian economies has allowed them to become hubs for medical and consumer goods, boosting exports as other countries reopen and demand recovers, the agency said. AfDB. The new Regional Comprehensive Economic Partnership trade agreement is expected to further boost trade prospects.
“Asian supply chains have been more resilient than those in advanced countries,” AfDB senior economist Jong Woo Kang told Bloomberg Television on Wednesday. This has helped keep any widespread inflationary pressures in the region at bay, except for sporadic spikes in food prices, he said.
Foreign direct investment in the region has also remained resilient, declining by only 1.3% in 2020, compared to a drop of nearly 35% globally. Digital services – driven recently by fintech, payments, data processing and cloud computing – are emerging as a key sector, accounting for almost a quarter of the region’s FDI on average since 2003.
“Strengthening trade and value chain ties between Asia-Pacific economies is an encouraging sign for a resilient post-Covid-19 recovery,” AfDB Chief Economist Albert Park said in a statement. a separate statement, adding that the pandemic had undone hard-won gains. in poverty reduction.
Mobility remains a concern as continued virus outbreaks curb the flow of migrant workers and tourists. Still, remittances are estimated to have increased by 2.5% last year, supported by increased use of digital channels and currency depreciation in their home economies, the AfDB said.
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