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Global economy still looks good for Asia

Manu Bhaskaran
Manu Bhaskaran4/30/2018 08:00 AM GMT+08  • 10 min read
Global economy still looks good for Asia
SINGAPORE (Apr 30): Recent weeks have seen investors becoming more nervous. Bond, equity and currency markets have turned more volatile. It appears that three sets of risks have conspired to hurt business and investor sentiment — signs of slower global
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SINGAPORE (Apr 30): Recent weeks have seen investors becoming more nervous. Bond, equity and currency markets have turned more volatile. It appears that three sets of risks have conspired to hurt business and investor sentiment — signs of slower global growth, the ill-tempered exchanges between the US and China over trade and -geopolitical concerns.

But have the risks really escalated enough to warrant a more pessimistic view of the global environment? If one looks closely at each of the concerns above, the risks in most cases seem contained in the short term. Our view is that, first, the cyclical upswing in the global economy is not only set to continue after a temporary deceleration, but could even surprise on the upside. Second, we believe that, while there are real risks to trade in the long term, the near-term risks are less alarming as there is a strong chance that the US and China will sort out their differences. Finally, on geopolitical risks, we find that risks in Asia have actually diminished — but flashpoints in the Middle East look to be far more dangerous than many realise.

Global economy: Upside surprises still possible

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