Is the bottom near for Asian economies?
Analyst said it’s difficult to be bullish amidst events in Europe and the US.
In its Asian Economic Monitor, UBS Investment Research said, “Manufacturing is global. When one part of global manufacturing slows then others follow.” That is why Asia’s trade exposure to a US/EU slowdown as a percent of GDP, according to UBS Investment Research, cannot be neatly disaggregated.
UBS Investment Research noted:
| What the numbers say: Year-on-year growth continued to decelerate in 2Q11, reflecting a high base of comparison but more importantly a material slowdown in sequential growth momentum. In particular, Singapore, Thailand and Hong Kong contracted sequentially in 2Q11. What they mean: GDP is the broadest measure of economic activity. It is strongly correlated with the profit cycle and provides important clues about inflation and the direction of policy. Strong GDP often suggests policy will tighten; weak GDP implies a policy bias for pro-growth. 12-month outlook: Last month we downgraded Asian growth to 6.4%y/y in 2012E from 7.3%. |
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