Business confidence among Asian companies soared to the highest level seen so far this year as economic activity improves in the region and markets rest their hopes on the rollout of COVID-19 vaccines to contain the global pandemic. The Thomson Reuters/INSEAD Asian Business Sentiment Index improved to 62 in Q4 2020 from 53 in the previous quarter – an index that measures the business outlook among companies in Asia over the next six months.

The business sentiment index remains above the 50-threshold, indicating optimism among Asian companies, amid rising hopes that the worst of the coronavirus crisis is over and recovery could soon resume. However, over 50% of companies highlighted coronavirus cases and possible scarcity of vaccines in some parts of the world as possible risks that can hurt their business.

Economics professor at INSEAD, Antonio Fatas, observes, “There’s a sense of optimism going forward. Things are getting better but they are getting better with still a dose of uncertainty. The effect of the crisis is very different across sectors.”

Around 25% of companies surveyed also highlighted concerns about having to cut jobs that could impact domestic consumption and stand in the way of economic recovery. In addition, the possibility of central banks ending stimulus initiatives and the impact of President-elect Joe Biden remaining tough on China were also listed as one of the top risks businesses in Asia faced.