GDP growth across Emerging Asia has slowed, but is likely to pick up again soon. Domestic demand, trade between the emerging markets, as well as policy flexibility, will cushion the downside. Restraining inflation and ensuring that asset bubbles do not develop will be policymakers’ top priorities. Interest rates are likely to move up further, while more capital controls and targeted credit restrictions are probable too. The current rocky period is likely to continue for a few more months yet. Nevertheless, the rally in currencies still looks to have far to go and 2011 overall should be another good year for equities across Emerging Asia.
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