TWO ISSUES will be critically important for ASEAN members to shape their recovery from the COVID-19 pandemic: strengthening regional cooperation and improving domestic resource mobilization.
First is the need to leverage stronger regional cooperation to enhance regional financial safety nets, deepen regional trade and supply chains, and build regional health security.
US interest rate hikes often drive capital outflows from emerging markets, which can trigger currency and financial volatility. At this stage of the pandemic, the additional policy supports and accelerated vaccine rollouts in advanced economies have improved their near-term recovery prospects. These economies could start policy normalization earlier than expected. Long-term interest rates in some advanced economies have already risen on positive outlooks and inflation concerns, rattling global financial markets.