Deloitte: Three steps to APAC’s economic recovery in 2021
The three themes of rehabilitation, rectification and reform look set to shape Asia-Pacific’s economic future in 2021, according to a new report from Deloitte.
These three R’s to recovery following the global pandemic are explored in the paper, Three themes likely to drive 2021 outlook: Rehabilitation, rectification, and reform, which suggests the near-term outlook for APAC countries is “modestly good”.
“The end result will be a fairly good year in 2021,” predicted Deloitte. “We see economic growth gathering momentum, price pressures remaining largely benign, external imbalances at muted levels and currencies largely steady.”
Rehabilitation is cited as the first step for APAC economics to set off on a more normal economic track. Deloitte reports that governments and corporations will aim to resume normal operations throughout next year.
“We expect some, if not a majority of, governments to maintain expansionary fiscal conditions. Other means of mitigating risks, such as moratoria on loan repayments, other regulatory forbearance, and government guarantees on loans, will likely continue,” comment Deloitte.
Another factor highlighted in the report is governments’ ability to manage the pandemic and their capacity to test, isolate, and treat patients on a massive scale. “Economies with reliable health care capacity and widespread community cooperation may show faster economic recovery than others.”
Deloitte predicts that countries with a large domestic demand, such as China and India, may be able to weather the storm should external demand remain patchy.
The second step is identified as rectification throughout APAC countries in a bid to build resilience against future shocks.
Deloitte report that health care systems will be a top priority and governments will have to focus on these three points:
- Supply of critical equipment for pandemic control, PPE and testing kits
- Availability of adequately trained medics who can be quickly deployed
- Easy accessibility of medical facilities, especially in rural areas
Other priorities highlighted in the paper include management of debt within each territory, infrastructure spending and improvement of business ecosystems to attract domestic and foreign investors.
“Consumer debt remains high in South Korea, Thailand, and Malaysia, where central banks will renew efforts to contain growth once the crisis is over,” Deloitte.
Apart from the pandemic, policymakers in Asia-Pacific have had to contend with a series of challenges to their economic development models, says the report. “The pace of globalisation has slowed with the rise of protectionism and US China trade tensions. New technologies are disrupting whole industries, and some may alter the value of competitive advantages that developing economies enjoy.
Deloitte suggests that several countries could introduce more fundamental reforms directed at producing a new model for economic management and development to adapt to the substantial changes.
“Not just the big economies, the smaller ones too are looking at ways to adapt to a new and possibly more challenging environment,” says Deloitte who predict Asia-Pacific economies will benefit from these three-steps to recovery.
“These factors will also prepare the region for game-changing innovations and disruptive new technologies that are rapidly approaching take off,” conclude Deloitte.
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.