Economics | 60 min video | December 2021

MacroBrew - Asia Outlook 2022: As the Tide Turns

Looking into 2022 - what to expect

We see Asia’s bumpy upcycle extending into early 2022 but expect supply constraints to morph into an export-led demand downturn from mid-2022.
The inflation rate will likely edge higher, but the underlying theme will remain one of benign inflationary pressures and gradualism on monetary policy normalisation. We also see lower terminal policy rates in this cycle.
Relative to consensus, we are more positive on Singapore, Malaysia and Taiwan, more negative on South Korea and the Philippines, and we see macro risks in Indonesia and India.

We are cautious on Asia’s economic outlook in 2022. The emergence of the Omicron variant has increased uncertainty, but we see Asia’s bumpy upcycle extending into H1 2022, supported by easing supply bottlenecks. However, we expect an export downturn to begin in mid-2022, reflecting three factors: first, spillover effects from a slowing China – Asia’s exports to China are equal to its total exports to the US and Europe combined; second, pent-up demand for goods from developed markets will likely fade; and third, a moderation in the tech cycle.

Read our full article here.

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Contributor

Rob Subbaraman

Head of Global Macro Research

Ting Lu

Chief China Economist

Sonal Varma

Chief Economist, India and Asia ex-Japan

Jeong Woo Park

Asia Economist

Euben Paracuelles

Week Ahead Podcast Host and Chief ASEAN Economist

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