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In assessing the economic outlook for Asia, analysts at Nomura explained that their long-standing view is that Q3 2018 is the highest-risk quarter for a painful snapback as the risk premium is repriced.  

Key Quotes:

  • Asia’s economies are exposed to high oil prices, rising US rates, trade protectionism and China resuming its slowdown.
  • India and parts of Southeast Asia are the region’s new stars in terms of rising long-run potential growth.  
  • China: We expect moderate policy easing in the coming months as the economy feels the pinch from deleveraging.  
  • Korea: We believe the BOK will hike in November 2018 and once more in 2019, taking the terminal rate to 2.00%.  
  • India: The macro outlook is likely to become murkier due to slower growth, higher interest rates and political uncertainty.  
  • Indonesia: We expect growth to rise, boosted by coordinated policy stimulus and reforms gaining more traction.”
  • Australia: Solid growth and a gradual rise in inflation should lead to a rate hike in early 2019.