Most countries in Emerging Asia should continue to grow at a decent pace over the next couple of years as loose monetary policy helps support demand. The key exception is China, where growth looks set to slow as policy stimulus is withdrawn. Overall, we expect regional growth to come in at around 5.0% in both 2017 and 2018. Asian currencies are likely to come under further downward pressure against the US dollar if, as we expect, the US Fed hikes interest rates more aggressively than the market expects. Equities, however, should do better, helped by low valuations. Bond yields are likely to rise gradually.
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