“There is no reason why the monetary and fiscal measures will not work,” said Tim Condon, chief economist at ING Barings “There are no structural impediments in the US to prevent a recovery in the first quarter, and when the US economy stabilises, sentiment will improve markedly in Asia.”
Hong Kong, China, Korea, Indonesia, and the Philippines are expected to be the chief beneficiaries of any early US economic recovery, where strong domestic demand can be successfully generated as a commensurate for an “export-less” recovery, said Condon.
However, other Asian economies such as Taiwan, Thailand and Malaysia may suffer what Condon calls ‘Asiasclerosis’ – where GDP growth has been hampered by the difficulty of asset restructuring in the aftermath of the 1997-98 Asian crisis. The problem in ongoing restructuring will depress the return on capital and undermine domestic demand, claimed ING Barings.
The week on Risk.net, July 7-13, 2018Receive this by email