Weaker credit growth to weigh on region

Most countries in Emerging Asia should record reasonable growth over the next couple of years, helped by a combination of supportive monetary policy and a pick-up in demand from advanced economies. That said, it is unlikely to be all plain sailing. Cooling credit growth will hold back domestic demand in a number of economies, including China. Uncertainty over the pace and timing of monetary policy tightening in the US may cause renewed volatility in the region’s financial markets. But on the whole, we expect most currencies and equities to record decent gains in 2014-16.