Economic growth slowed nearly everywhere in Asia last quarter. This weakness, alongside low inflation and, in the case of Korea and Australia, worries over currency strength, prompted five central banks to cut interest rates last month. Looking ahead, with the global recovery set to disappoint, GDP growth in most of Asia is likely to remain weak. Meanwhile, inflation is set to stay subdued. The upshot is that we expect monetary policy to remain loose until at least the end of the year, with further rate cuts likely in around half of the countries we track.
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