The dangers of decoupling

Economic growth across Emerging Asia accelerated last quarter, as strong domestic demand compensated for weak exports. But while this “decoupling” has enabled Emerging Asia to shrug-off the weakness in global demand, it has come at a cost. Private sector debt, especially among households, has increased sharply. While the risk of an imminent financial crisis is low, household credit growth in some countries has already started to slow sharply, weighing on economic growth.