Loose monetary and fiscal policy to support growth

While Emerging Asia continues to face headwinds, loose fiscal and monetary policy in most economies should continue to support demand over the next couple of years, and we expect regional growth to remain broadly flat at around 4.5% in 2017-18. However, a rapid build-up in debt in some economies, particularly China and Korea, poses a growing threat to the outlook. On the financial markets front, we expect currencies in Emerging Asia to weaken against the US dollar over the coming year as the Fed resumes its tightening cycle. Equity markets should continue to record decent gains, while bond yields are likely to remain very low.