Malaysia will begin treating Covid-19 as an endemic disease towards the end of October, the country’s minister for international trade and industry, Mohamed Azmin Ali, said on Tuesday.

Covid would be endemic if the SARS-CoV-2 virus that causes the disease becomes a permanent presence in the community and continues to circulate among people. Other endemic diseases are influenza, dengue, and malaria.

Malaysia struggled to tame a surge in daily Covid-19 cases, which resulted in the government imposing several rounds of bans. The country’s central bank cut its forecast for economic growth in 2021 to 3% to 4% last month, from 6% to 7.5%.

But Malaysia’s economy has remained resilient, with the recovery being driven by better foreign demand and ongoing infrastructure projects, said Azmin, who is also a senior minister in the current administration.

“The affordability and accessibility of vaccines are key factors for a sustainable economic recovery,” said the minister of “Squawk Box Asia” of CNBC.

More than 75% of Malaysia’s adult population is expected to be fully vaccinated by the end of October, Azmin said. According to official information, 88% of adults – or around 63% of the total population – have currently received at least one dose of Covid vaccine.

Health Minister Khairy Jamaluddin said last week that the Malaysian government would simplify some social distancing measures in the coming weeks in preparation for a Covid-endemic phase. However, face masks are still required to contain the spread of the coronavirus, he added.

Global supply chains

In addition to Malaysia, Southeast Asian countries such as Indonesia, Thailand, Vietnam and the Philippines have seen a resurgence of Covid-19 cases caused by the more transmissible Delta variant.

Southeast Asia plays an important role in the global manufacturing supply chain, particularly in semiconductors and critical apparel, said Joseph Incalcaterra, chief economist for ASEAN at HSBC.

Incalcaterra told CNBC’s Squawk Box Asia on Monday that Malaysia was a major manufacturer of automotive semiconductors, which were in short supply. Fortunately, more manufacturing capacity is going back online in Malaysia, said the economist.

“But if you look at Vietnam – which is of course a major manufacturer of clothing, especially in the south of the country – it will have an impact on the coming weeks and months,” Incalcaterra said.

Vietnam has cordoned off its largest city and the business center of Ho Chi Minh City in the south of the country. But the city could resume economic activity in phases starting next week, Reuters reported.