Divergent Recovery in the ASEAN+3 amid the COVID-19 Pandemic

The ongoing recovery in the ASEAN+3 region has been uneven across sectors and businesses, segments of the population, and individual economies. Manufacturing has rebounded quickly and innovation in digitalization is thriving, but close-contact services and the travel industry continue to be heavily affected by virus-induced restrictions. Economies with slower vaccination progress, less policy support, and greater reliance on travel and tourism will likely lag behind, widening intra-regional disparities in living standards, and reversing gains in poverty reduction.

AMRO’s Divergent Recovery Index (DRI) attempts to measure this potential divergence across economies in the region. The index combines several health, economic, and capacity indicators, capturing the progress in virus containment and vaccinations, the composition of each economy, remaining policy space, cumulative output losses, as well as innovation potential. By aggregating these indicators into an overall index, the DRI could provide useful insights into areas of strength and weakness relative to peers, and possibly allow policymakers to gauge the way forward.

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