The latest Thomson Reuters/INSEAD survey shows a marked improvement in the business sentiment among Asian companies into Q3 as a result of lockdown restrictions being lifted even though concerns about economic recovery still dominate. Business outlook for the next six months surged to 53 in Q3 2020 from the previous quarter’s reading of 35, rising above the 50-threshold indicating optimism.

The main driver behind the rebound in business sentiment is the lifting of lockdown restrictions across most Asian countries, which has helped reduce risks to businesses and economies. Despite the easing of lockdown measures, the coronavirus pandemic and a resurgence in cases remain the top risk for over two-thirds of businesses surveyed.

Around 14% of businesses also mentioned the possibility of a global economic recession as a top risk, while others pointed to uncertainty driven by the upcoming presidential elections as a top risk. The pandemic remains the biggest concern around the world, with Europe expected to reimpose lockdowns as it experiences a spike in the number of cases all over again.

Economics professor at INSEAD Singapore, Antonio Fatas, observes, “We’re recovering with a large dose of uncertainty. If it was just because of Asia, I think the numbers would be more positive but the reality is the world is not just Asia.”