A promising start to 2012, but will it last?

Growth in emerging Asia looks to have picked up in Q1. Strength in the US is helping to offset weakness in Europe for Asia’s exporters. There are encouraging signs of domestic demand improving early in 2012, even in many of Asia’s most trade-reliant economies. However, global growth is still likely to be sub-trend this year. We also expect oil prices to fall back sharply, which will ease inflation fears. Accordingly, we continue to forecast policy loosening later this year.