KUALA LUMPUR: Some Asia-Pacific countries, including Malaysia, are expected to take significant hits in terms of economic growth in the third quarter (Q3) this year due to a resurgence in COVID-19 infections in the region, according to Moody's Analytics.

The research house expected that Indonesia would be hit the hardest, putting at risk Moody's Analytics' downwardly revised growth forecast of 4.5 per cent for the country for 2021.

"Working against Indonesia is that domestic demand is a relatively large share of the economy compared with others in Southeast Asia, so exports aren't as much help in offsetting domestic weakness at the aggregate level.

"Vietnam and Malaysia will also take significant hits," it said in an analysis titled "Macro Roundup: COVID-19 Is Bruising Asia's Recovery" published today.

While noting that 2021 is certainly better than 2020, Moody's Analytics said that last week proved that for many economies in Asia-Pacific, COVID-19 management and containment is an ongoing challenge as the Delta variant sweeps through the region.

For instance, it said, Indonesia declared its first national lockdown as cases spiked last week with the seven-day daily average sitting just under 30,000, while Japan has declared a state of emergency that will continue through the Tokyo Olympics, scheduled to begin on July 23.

"This will hit the already-decimated hospitality industries, which were hoping for a lift from the Olympics," it said.

The research house said the lockdown in Sydney, Australia, has been extended as the highly contagious Delta strain keeps case numbers above comfort levels, while the COVID-19 cases in Vietnam are currently at their worst ever.

"A lockdown in Ho Chi Minh City began this week, while a fourth, vigorous wave has hit South Korea," it added.

Moody's Analytics pointed out that a uniting theme of these economies struggling with a COVID-19 resurgence and renewed social distancing is their sluggish domestic vaccination schedules.

"All of these economies are far from herd resilience, making them vulnerable to ongoing lockdowns pressuring domestic demand and the broader recovery, a situation that may continue through the second half of 2021," it said.

-- BERNAMA