The region’s original tiger economies, Hong Kong, Singapore, Taiwan and Korea, are likely to struggle over the next couple of years against a backdrop of cooling credit growth, bursting property bubbles and mounting structural problems. The outlook is better elsewhere. The sense of panic about China’s economy has eased in recent months as fears of a “hard landing” have receded. And while sentiment remains downbeat, we think further policy support this year means that growth is more likely to rebound than fall in the months ahead. Growth in India and most economies in South East Asia should also pick up a bit this year, helped by loose monetary policy. An improvement in global sentiment should provide some support to Asian financial markets, with currencies and equity markets likely to strengthen over the next couple of years.
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