Deloitte SEA CFO Forum - Regional Economic Outlook 1 September 2020
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Deloitte SEA CFO Forum Regional Economic Outlook 1 September 2020
Welcome
Timothy Ho
SEA CFO Program Leader
Deloitte Southeast Asia
© 2020 Deloitte Southeast Asia Ltd. Deloitte SEA CFO Forum | Regional Economic Outlook 2
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Speaker and Moderator
Speaker Moderator
Song Seng Wun Marcus Ng
Director and Economist Economics Advisory Leader
CIMB Private Banking Deloitte Southeast Asia
© 2020 Deloitte Southeast Asia Ltd. Deloitte SEA CFO Forum | Regional Economic Outlook 5
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THE MACRO VIEW
Big Picture
01 SEPTEMBER 2020
FORWARD Your Business
The initial economic impact of virus pandemic
The March/April PMI data showed record rates of collapse around the world as output, new orders and
employment all declined at record rates. Chinese economy stabilised after its record plunge in February.
Source: IHS Markit, BloombergGlobal economy collapsed in Q2 2020 on lockdown measures
The global economy cratered in Q2 2020 as output, new orders and employment all declined at
record rates on the back of supply and demand shocks caused by lockdowns triggered by the covid-
19 pandemic.
Source: IHS Markit, BloombergReopening moves have help to get business on their feet
Uneven recovery underway as governments around the world allow businesses to reopen amidst
spikes in infections
Source: IHS Markit, BloombergThe “Great Lockdown” recession The IMF predicts the “Great Lockdown” recession will be the steepest in almost a century, warning that there is "extreme uncertainty around global growth forecast“, warning of "multi-layered crisis" in many countries and "severe risks of a worse outcome".
CIMB Bank’s latest macro forecast
A key factor in the consequences for economic performance as governments ease lockdowns,
besides the disease dynamics, will be human behaviour - how risk averse people and firms will be
despite governments allowing greater interaction
Source: CIMB Bank Bhd’s Week Ahead: 24 August 2020CIMB Bank’s latest ASEAN-5 macro forecast
Double digit year-on-year contractions in every ASEAN5 except Indonesia in Q2. After a “really bad”
1H 2020, a “less bad” 2H 2020 and a much better 2021 and beyond?
Source: CIMB Bank Bhd’s Week Ahead: 25 August 2020Containing the fallout of a global recession
The coronavirus outbreak has already extracted a large human toll, caused
simultaneous supply and demand shocks on the global economy. Reopening risks
contained with socially distancing measures in place? 2nd/3rd wave to be slower
than the first?
Governments and central banks continue to take a “whatever it takes” approach
because this COVID-19 pandemic spilling is spilling over from a global health
crisis to an economic crisis - jobs and livelihoods of people around the world are
under threat.
Financial markets trying to look past US-China tensions, warnings of a deep
recession in 2020 to recovery prospects of nations reopening economies,
Covid-19 treatment expectations. Market sentiment further supported by
ongoing government and central banks efforts to cushion the impact of the
virus outbreak on their economies.What is the “new normal” post-Covid-19?
Rise of technology: Digitization, e-commerce,
contactless interfaces/interactions, Robots, IoT, Big
Data
BCPs will incorporate lessons learned from current pandemic
Working From Home to remain? Webinars? Implications for
office/property demand
Supply-chains diversification or national interests to prevail?
At the macro level, can governments afford the debts
accumulated “to save their economies”? Poverty crisis in
emerging and developing economiesSpurred by low interest rates, the record level of debt is a
major risk to global recovery
Emerging & Developing Asia: External Debt
300 4,500
4,000
250
3,500
200 3,000
2,500
150
2,000
100 1,500
1,000
50
500
0 0
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
External Debt, total (US$bn, RHS) Total Debt (% of GDP) Total Debt (% of exp)
Source: IMFDiscussion Themes 1. The response and recovery 2. The risk outlook 3. The COVID world © 2020 Deloitte Southeast Asia Ltd. Deloitte SEA CFO Forum | Regional Economic Outlook 17
Contact
SEA CFO Program
cfoprogramsea@deloitte.com
© 2020 Deloitte Southeast Asia Ltd. Deloitte SEA CFO Forum | Regional Economic Outlook 18Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more. Deloitte Asia Pacific Limited is a company limited by guarantee and a member firm of DTTL. Members of Deloitte Asia Pacific Limited and their related entities, each of which are separate and independent legal entities, provide services from more than 100 cities across the region, including Auckland, Bangkok, Beijing, Hanoi, Hong Kong, Jakarta, Kuala Lumpur, Manila, Melbourne, Osaka, Seoul, Shanghai, Singapore, Sydney, Taipei and Tokyo. This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms or their related entities (collectively, the “Deloitte organization”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No representations, warranties or undertakings (express or implied) are given as to the accuracy or completeness of the information in this communication, and none of DTTL, its member firms, related entities, employees or agents shall be liable or responsible for any loss or damage whatsoever arising directly or indirectly in connection with any person relying on this communication. DTTL and each of its member firms, and their related entities, are legally separate and independent entities. © 2020 Deloitte Southeast Asia Ltd.
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