Are emerging economies prepared as the global liquidity tap turns off?
Many emerging economies, which benefited significantly from the capital inflows post the 2008 crisis, are now staring at the possibility of this liquidity drying up. We take a look at what will happen if and when the tap runs dry as the central banks of four major advanced economies tighten their monetary policies.
Mexico: Uncertainty looms
Uncertainty looms large over Mexico, as the stability achieved over the last 15 years could be threatened by several factors, the most crucial of which is likely the renegotiation of NAFTA. With presidential elections around the corner, Mexico will rely on a solid macroeconomic policy to navigate a rocky 2018.
China: Slow, but steady
China continues to report moderately strong growth, despite some slowdown in economic activity. The modest growth is expected to continue in 2018, notwithstanding longer-term issues stemming from a declining working-age population, technology-driven skills gap, and lack of transparency.
Thailand: Ending 2017 on a positive note
Thailand’s economy has picked up pace, buoyed by exports growth, pick-up in consumer spending, and low inflation. Rising tourist inflows should also add economic activity in the fourth quarter. High household debt and weak investment growth, however, continue to remain a drag on the economy.
The Philippines: It just keeps getting better
A strong Q3—preceded by two quarters of steady growth—bodes well for the Philippines. The economy is on the upswing, buoyed by exports and government consumption, and strong enough to absorb a drop in private consumption growth in Q3.
Asia Pacific Economic Outlook, Q4 2017
This edition gives the near-term outlook for Malaysia, the Philippines, Taiwan, and Vietnam, in addition to a deep-dive into Asian exports. Malaysia and Vietnam appear poised for strong growth; the Philippines and Taiwan—despite their current strong standing—may face some headwinds in the form of subdued private consumption growth and geopolitical tensions, respectively. Our special topic examines the tenability of the current recovery in Asian exports.
The global economy: Set to hit the gas, yet wary of roadblocks
Ten years since the recession, we take a look at how the global economy is faring. Economic activity seems to be strong, driven by trade growth, easy monetary policies, and positive consumer sentiment. However, risks—in the form of high household debt, increasing uncertainties due to geopolitical events, rising protectionist rhetoric, and a move away from a multilateral trading order—could derail the current growth story.