S&P Forecasts Covid-19 Would Double an Unemployment Rates across Asia-Pacific

S&P Global Ratings said an unemployment rates across Asia-Pacific could rise as much as 3% points, double as the average recession, due to the coronavirus pandemic and may take a long time to win back. 

 

Economic Research: Jobs And The Climb Back From COVID-19, which released on Monday, pointed out that the social distancing measures “hit the engine of job creation”, especially the service sector as its principle activities “often require human-to-human contact while mitigation policies aim at social distancing”.

 

The service sector has been a main contribution to total employment growth over the past two decades across the region, particularly in China and other emerging markets, “agricultural jobs have disappeared but contrary to popular wisdom, these workers did not stream mainly to factories. Instead, they mostly started work in hotels, restaurants, and shopping malls.”

 

The job losses report based on projected reduced growth of about 7.5% points, which could impact on unemployment rates in Asia-Pacific region such as Australia, Japan, Korea, New Zealand, and Thailand.

 

S&P estimated each countries unemployment rates as follows; Australia more than 3% points, Japan more than 2% points, South Korea more than 4% points, New Zealand closes to 3% points and Thailand less than 1% point. Otherwise, the unemployment rates could rise their peak about four quarters after the growth decline.

 

“For Thailand, the unemployment rate hardly moved at all” S&P stated.

 

“Given the way the services sector is being hit by social-distancing measures, it’s plausible that, for every percentage point fall in growth in Asia-Pacific, the rise in unemployment could be larger now than in previous cycles.” said in the report.

 

Among nine major economies in Asia-Pacific, the largest rises are seen in Australia, Hong, and New Zealand Australia.