What businesses and policymakers will need to consider
After months of paralyzing lockdowns, most Southeast Asian countries are now in the process of easing restrictions and reopening their economies. Policymakers, businesses and consumers alike are now looking forward to an economic recovery, and a gradual return to normalcy.
There are grounds for optimism - despite initial fears of an uncontrolled outbreak in many of Southeast Asia’s more populous nations, most countries have achieved relative success in keeping the Covid-19 epidemic under check. Based on recent data, Southeast Asia has recorded less than 2% of total cases and less than 1% of virus deaths, despite making up about 9% of the global population.
How do we get consumers to spend at pre-Covid levels?
- Household incomes have broadly declined, and as a result discretionary spending is expected to similarly decline
- Public anxiety over Covid-19 remains high relative to the actual spread of the virus, and as a result consumption activity is delayed
- Fears of a second wave and new lockdowns act as a further drain on spending expectations
- The way forward – the importance of accounting for changes in consumer outlook in stimulating demand