Emerging Asia’s economies fared better in Q1 than Q4. Both Singapore and Taiwan returned to quarterly growth, while Korea’s economy grew at a faster q/q rate. Business and consumer surveys show an improvement in confidence, which bodes well for this quarter. Nonetheless, concerns about the euro-zone debt crisis have escalated once more in recent weeks, causing equity flows to reverse and stock prices to fall. We expect the situation in Europe to worsen further this year and drag down global growth. Given emerging Asia’s reliance on exports, we continue to forecast policy loosening ahead.
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