Domestic challenges coming into focus

Most countries in Emerging Asia should enjoy a steady recovery over the next couple of years on the back of loose monetary policy and a pickup in demand from advanced economies. However, a number of domestic issues within the region are coming into focus. Although a hard landing in China is unlikely, a switch to a less investment intensive growth model will create difficulties for some in the region. Meanwhile, structural constraints are likely to become a growing concern in a number of other economies, most notably India and Indonesia. Both hold elections this year, but hopes that new leaders will usher in the wave of reforms needed to kick-start their economies may be disappointed.