The emerging Asia upswing continues to pick up speed, inflation has accelerated, and India has started to lift policy rates. In May, we expect that rates will move up again in Australia and Malaysia. Worries over contagion from Greece have curbed the rise in Asian markets but Asia has deleveraged since its mid-to-late 1990s crisis. Only the Philippines and India still have relatively large government debt burdens but both countries have implemented credible fiscal consolidation policies in recent years and are able to grow rapidly. Vietnam’s budget gap is large but the country’s overall debt burden is small. The rise in Asian equity markets and in regional currencies should resume soon, especially as a relaxation of China’s renminbi peg against the US dollar looks close.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services