Economic activity across emerging Asia is showing further signs of recovery. Growth has been strongest in South East Asia, where domestic demand has continued to shrug off the impact of weak exports. Inflation in most countries is relatively low, and is unlikely to be a barrier to further policy loosening, if needed. Given the uncertainties facing the developed world, financial markets in emerging Asia are likely to be in for a bumpy ride over the next year. Most Asian currencies have fallen over the past month.
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