Exports from Asia have been weak so far in Q2 but domestic demand has held up reasonably well. Nonetheless, we doubt that growth in Asia’s trade-dependent economies would remain so resilient if global demand were to weaken significantly further. Headline inflation rates generally fell in May and the recent sharp falls in oil prices, if sustained as we expect, will put significant downward pressure on inflation ahead. Lower inflation would provide more scope for central banks to support growth. Accordingly, while almost all central banks kept their policy rates on hold this month, we continue to expect rate cuts across much of the region by year-end.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services