Risk of “Grexit” hangs over Asia’s export outlook

The direct links between Emerging Asia and Greece are very limited. Exports to Greece account for only a tiny proportion of regional GDP, while banking sector ties are negligible. What matters more from an Asian perspective is not so much the crisis in Greece itself, but whether a “Grexit“ causes significant disruption in the wider euro-zone economy. Some of Asia’s most trade-dependent economies, notably Hong Kong, Singapore and Vietnam, would be hit hard if exports to the euro-zone fell sharply. The impact of a “Grexit” on global financial markets could also cause problems in the region. The Asian economies that would be most vulnerable to a sharp fall in global risk appetite would be those with large current account deficits (namely Indonesia) or high levels of short-term external debt (Malaysia).