Covid appears to be the ‘Achilles’ heel’ for Southeast Asian economies - Jefferies

CNBC reports that Sean Darby, global head of equity strategy at Jefferies, said that the failure to contain Covid infections is impeding the recovery of many Southeast Asian economies.

“Indonesia, like many of the ASEAN economies, has yet to really get to grips with the Covid-19 virus,” Darby told CNBC.

“That seems to be the Achilles heel for the ASEAN economies at the moment,” he said referring to Association of Southeast Asian Nations regional grouping.

Goldman Sachs recently slashed its 2021 growth forecasts for major economies in Southeast Asia as a surge in the more infectious delta variant triggered daily record highs in infections in Indonesia, Malaysia and Thailand these past weeks.

The surge in infections regionally has also called into question the credit ratings of South East Asia’s economies.

Moody’s Investors Service warned Monday that resurgent Covid infections in Indonesia could undermine the country’s credit rating.

Days earlier, S&P Global Ratings issued similar comments, warning in a July 15 report that Indonesia’s “existing credit buffers on ratings will be chipped away if ongoing lockdowns are prolonged.”