Rate-cutting cycle not over yet

National accounts data published over the past month or so confirm that many economies experienced record-breaking rebounds in GDP in the third quarter. However, there are significant variations across the region. Output is now back to its pre-crisis trend in Taiwan and China and is above its pre-crisis level in Vietnam. But many economies remain very depressed, with output in the worst-hit countries of Thailand, India and the Philippines still around 5-10% below its pre-crisis level. Given the big hole that many countries still find themselves in, monetary policy will need to remain loose for some time to come. Indonesia, the Philippines and Vietnam have all cut rates in recent weeks, and we have further easing pencilled in for these three economies as well as India next year. China is the only country where we are expecting interest rate hikes in 2021.