External headwinds will test Asia’s domestic resilience in the latter half of the year, as higher oil prices trigger inflation risks and force economies here to tighten monetary policies, says Deutsche Bank in its 2H2022 outlook on June 23.
The external demand slowdown, coupled with softer growth in the developed markets, will weigh on Asia’s growth, says Stefanie Holtze-Jen, chief investment officer for Asia Pacific at Deutsche Bank.
That said, China should see more tangible recovery with more reopening and more stimulus measures, she adds.
We believe that China’s growth recovery in 2H2022 this year will be strongly supported by reopening and stimulus.
While operating margins have taken a hit — both in manufacturing, as raw material costs escalate, and in services due to wage inflation and operational costs — sales growth compensated for it.