Asia-Pacific Corporate Payment Survey 2020: COVID-19 will overturn last year’s incipient recovery

Coface’s annual Asia Corporate Payment Survey evaluates the payment behaviour of companies across nine economies in Asia Pacific. Data collection took place during the fourth quarter of 2019, before the COVID-19 pandemic, and valid responses from over 2500 companies in the region were collected. 2019 was dominated by trade tensions between the United States (U.S.) and China. Despite these trade disruptions, the region (excluding China) experienced an incipient recovery, favoured by supply chain shifts and additional liquidity from the U.S. Federal Reserve. The recovery will prove shortlived, as the COVID-19 pandemic severely threatens the growth outlook, with many economies in the region expected to contract the most since the Asian Financial Crisis in 1997-1998. On a GDP-weighted basis, the growth of the nine economies in our sample will decline to 0.3% in 2020, -0.65% excluding China. This is much worse than the 4.6% GDP growth rate registered in 2019 and is also weaker than the 2.9% registered in 1998 (0.76% excluding China). In this context, we expect that companies and sectors that continued to experience pressures in 2019 will be in a worse position to navigate the challenges surrounding the COVID-19 pandemic and the global recession in 2020.