Delta blow knocks wind out of Asia's economic recovery | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Saturday
July 12, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
SATURDAY, JULY 12, 2025
Delta blow knocks wind out of Asia's economic recovery

Global Economy

Reuters
24 August, 2021, 11:40 am
Last modified: 24 August, 2021, 02:30 pm

Related News

  • UK economy shrinks again in May, raising new worries over outlook
  • Bangladesh’s economic expansion slows in June as growth weakens in key sector: PMI
  • Actual impact will depend on how US retailers respond: Mostafa Abid Khan
  • The economy in FY25: Battling challenging times
  • Salehuddin for technological integration to develop SME sector

Delta blow knocks wind out of Asia's economic recovery

Asia's biggest firms are likely to post their first quarter-on-quarter profit decline in six quarters in July-September, falling 6.19%, showed a Reuters calculation based on Refinitiv Eikon analyst data of 1,069 companies with market capitalisation of at least $1 billion

Reuters
24 August, 2021, 11:40 am
Last modified: 24 August, 2021, 02:30 pm
General view inside the Pondok Indah shopping mall as the Indonesian capital reopens its shopping malls with a new policy requiring shoppers to show a coronavirus disease (Covid-19) vaccination certificate, in Jakarta, Indonesia, August 13, 2021. Photo :Reuters
General view inside the Pondok Indah shopping mall as the Indonesian capital reopens its shopping malls with a new policy requiring shoppers to show a coronavirus disease (Covid-19) vaccination certificate, in Jakarta, Indonesia, August 13, 2021. Photo :Reuters

Highlights:

  • Delta variant, slow vaccination catch much of region off-guard
  • Asia q/q profit likely 1st fall in 6 quarters in July-September
  • SE Asia July factory activity fell fastest since June 2020

Asia's robust economic recovery from last year's coronavirus low is losing momentum as a surge in Covid-19 cases sees shops empty again and factories close, dimming prospects for corporate profit growth after a blockbuster half year.

The rapid spread of the highly infectious Delta variant of the novel coronavirus and low vaccination rates have caught much of the region off-guard, especially in emerging markets, even as economies in Europe and North America reopen.

"It's clear that economies across the region are suffering more from Covid-19 than they previously did. The biggest factor is that Asia is poorly vaccinated," said Rob Carnell, Asia-Pacific head of research at ING in Singapore.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

While year-on-year corporate and economic indicators continue to show strong recovery, flattered by comparisons with 2020's sharp declines, quarter-on-quarter indicators reveal flagging momentum.

Asia's biggest firms are likely to post their first quarter-on-quarter profit decline in six quarters in July-September, falling 6.19%, showed a Reuters calculation based on Refinitiv Eikon analyst data of 1,069 companies with market capitalisation of at least $1 billion.

"There's no mistake there will be a slowdown in the third quarter," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

In the near-term, much depends on vaccination progress in Southeast Asia - a major production base - and whether China takes extra steps to support its economy, Fujito said.

Vehicle sales in China, the world's second-largest economy, slipped 11.9% in July versus the same month last year, falling for a third consecutive month amid virus outbreaks and a global semiconductor shortage which is curbing output.

Toyota Motor Corp, the world's largest automaker by sales volume, said last week it would cut September production by 40%  from its previous plan due to the chip crunch, though it retained production and sales targets for its fiscal year.

Regarding broader parts supply, Toyota executive Kazunari Kumakura said, "The spread of the coronavirus and lockdowns in Southeast Asia had a major impact."

SUPPLY HEADACHES

In Southeast Asia, soaring Covid-19 cases and subsequent lockdown measures have hit economic activity in both the services and manufacturing sectors.

Factory activity in the region contracted in July at the fastest pace since June last year, IHS Markit data showed.

"That's quite a strong signal that economic momentum in Southeast Asia will slow in the third quarter," said Rajiv Biswas, Asia-Pacific chief economist at IHS Markit in Singapore.

Delta outbreaks in Southeast Asia have caused supply chain headaches  for many of the world's largest manufacturers, many of which rely on auto parts and semiconductors made in low-cost bases such as Thailand, Vietnam and Malaysia.

Mitsubishi Motors Corp Chief Financial Officer Koji Ikeya said the Covid-19 resurgence will depress demand, the chip shortage would have a lengthy impact on production, and prices of steel and other materials are set to rise.

"Because of those risks, the environment surrounding us remains unstable," Ikeya said.

BASE EFFECT

In Malaysia and Vietnam, lockdown measures and cases of infection have forced factories to suspend operations.

"Of course, governments are trying to put in place better protection for essential workers ... for example, giving them priority for vaccination," said IHS Markit's Biswas.

The extent of any economic slowdown in Asia will not be fully known until governments release third-quarter gross domestic product (GDP) estimates later this year.

Asian economies that were moving from a state of relative openness to lockdown will probably see their GDP contract quarter-on-quarter, said ING's Carnell.

ING has already trimmed its growth forecasts for Thailand, Malaysia, Indonesia, the Philippines and Australia, he said.

"You're seeing 30-40% (year-on-year) export growth in many cases but you've got very strong base effects working through those things," Carnell said.

Top News / World+Biz

delta / Asia / Economy / Recovery

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Screengrab blurred
    Mitford murder sparks political storm as BNP in backfoot, opposition forces pounce
  • Representational image
    Some issues remain unresolved despite progress in 2nd round of US tariff talks: Press Minister Mortoza
  • US President Donald Trump gestures to the US flag flying on a new flagpole after stepping off Marine One returning from New Jersey at the White House in Washington, DC, US, 6 July 2025. Photo: Reuters
    Trump intensifies trade war with 30% tariffs on EU and Mexico

MOST VIEWED

  • Representational image
    In addition to 35% tariff, US demands 40% local value addition for 'Made in Bangladesh' goods
  • Screengrab blurred
    Killers bash in head of man with rock, stomp body with perverse pleasure
  • How tender rules and a lone bidder stall a $2.5b power plant
    How tender rules and a lone bidder stall a $2.5b power plant
  • Economist Abul Barkat; Photo: Courtesy
    Economist Abul Barkat arrested in graft case
  • Photo: UNB
    Saima Wazed Putul ‘placed on indefinite leave’ from WHO role amid corruption allegations
  • After India's visa restriction, China's Kunming is drawing Bangladeshi patients
    After India's visa restriction, China's Kunming is drawing Bangladeshi patients

Related News

  • UK economy shrinks again in May, raising new worries over outlook
  • Bangladesh’s economic expansion slows in June as growth weakens in key sector: PMI
  • Actual impact will depend on how US retailers respond: Mostafa Abid Khan
  • The economy in FY25: Battling challenging times
  • Salehuddin for technological integration to develop SME sector

Features

The 2020 Harrier's Porsche Cayenne coupe-like rear roofline, integrated LED lighting with the Modellista special bodykit all around, and a swanky front grille scream OEM Plus for the sophisticated enthusiast looking for a bigger family car that isn’t boring. PHOTO: Ahbaar Mohammad

2020 Toyota Harrier Hybrid: The Japanese Macan

6h | Wheels
The showroom was launched through a lavish event held there, and in attendance were DHS Motors’ Managing Director Nafees Khundker, CEO Imran Zaman Khan, and GMs Arman Rashid and Farhan Samad. PHOTO: Akif Hamid

GAC inaugurate flagship showroom in Dhaka

6h | Wheels
After India's visa restriction, China's Kunming is drawing Bangladeshi patients

After India's visa restriction, China's Kunming is drawing Bangladeshi patients

1d | Panorama
Photo: Collected/BBC

What Hitler’s tariff policy misfire can teach the modern world

2d | The Big Picture

More Videos from TBS

What is behind the Lal Chand murder?

What is behind the Lal Chand murder?

49m | TBS Stories
"Is there any hidden patronage of the government behind the groups creating the mob?"

"Is there any hidden patronage of the government behind the groups creating the mob?"

1h | TBS Today
News of The Day, 12 JULY 2025

News of The Day, 12 JULY 2025

1h | TBS News of the day
The beauty and brutality of life in the shadow of Kashmir killings

The beauty and brutality of life in the shadow of Kashmir killings

14m | TBS World
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net