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Analysts at ANZ suggest that with the shape of the upcoming business cycle unclear and monetary easing reaching its limits, Asian policymakers are turning to fiscal policy to bolster growth.

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“But how much can expansionary fiscal policies deliver? Not a whole lot by our estimates. Though the region is fiscally fit, the effectiveness of fiscal policy is muted by various issues such has openness to trade and low tax-GDP ratios. Much depends on the size of the fiscal stimulus.”

“Based on the latest available fiscal data, we believe fiscal policy will provide the largest boost to growth in South Korea. At the other end of the spectrum is Indonesia.”