Goldman Sachs’ chief economist says Asia is ‘best positioned’ to stage an economic recovery from COVID-19

Goldman Sachs’ chief economist says Asia is ‘best positioned’ to stage an economic recovery from COVID-19

Goldman Sachs


  • Goldman Sachs’ chief Asia economist Andrew Tilton told CNBC’s “Street Signs Asia” he is “reasonably upbeat” on the economic recovery going into 2021. 
  • He said: “We think Asia’s really the best positioned of the major regions right now, just given the good control of the virus in most of the regions outside of India and some parts of Southeast Asia.”
  • He said purchasing managers indices were better in September, suggesting momentum in the industrial sector remained strong. 
  • He said a fiscal deal in the US between Republicans Democrats would bolster growth in Asia.
  • A blue wave scenario where a Democratic president takes control of both the House and Senate would bolster growth but may also “pull forward” the timing of the next Fed rate hike,” he said. 
  • Visit Business Insider’s homepage for more stories.

Asia is far better “positioned” to stage an economic recovery from the pandemic, Goldman Sachs’ chief Asia economist Andrew Tilton told CNBC’s “Street Signs Asia” Monday. 

Tilton said he is seeing “reasonable global momentum” going in the fourth quarter. 

“We think Asia’s really the best positioned of the major regions right now, just given the good control of the virus in most of the regions outside of India and some parts of Southeast Asia,” Tilton said. 

“We just had a round of purchasing managers indices which were almost all better month-on-month, suggesting that industrial sector momentum remains pretty good,” he added. 

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China’s huge manufacturing sector continued to recover in September, affirming the world’s second largest economy is recovering from the pandemic. 

Tilton said most of the economic recovery in Asia has been led by the industrial sector, while the services sector lags somewhat. 

“In China, stimulus was less focused on providing income replacement to the consumer than for example what we saw in the US,” he said.

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“You do see relatively more sluggish recovery in consumer spending there, but I think given the good control of domestic transmission of the virus in China, we are seeing services activity come back there as well. It is farther behind than manufacturing, but it is recovering,” Tilton added. 

China is due to release its Caixin Services PMI reading for September this Thursday. 

Tilton said fiscal stimulus in the US would have a “positive spillover effect” in terms of growth to Asia, though he is not anticipating a deal before the US presidential election scheduled for November 3. 

Democrats and Republicans have been in a stalemate since July over the next size of the fiscal package. While House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin made some progress over recent days, a deal has still not been achieved. 

The Democrat-controlled House approved a $2.2 trillion stimulus proposal last week, but it is unlikely to be passed by the Republican-led Senate. 

Tilton said a “Blue Wave scenario”, where a Democrat presidency led by Joe Biden takes control of both the House and the Senate could pull forward the timing of a Fed rate hike. 

The Fed has so far indicated that it has no plans to inject any fresh stimulus into the financial system at this point, although interest rates will stay near zero until at least 2023. 

“In the event we have a Blue Wave…we think the prospects for a very large fiscal stimulus are probably bigger and that would have positive effects on growth but that would ultimately pull forward the ultimate timing of a Fed rate hike,” he said. 

Tilton said: “We are still reasonably upbeat on the economic recovery going into 2021.”

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