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Could a US recession derail Asia’s recovery?

Manu Bhaskaran
Manu Bhaskaran6/29/2022 06:46 PM GMT+08  • 10 min read
Could a US recession derail Asia’s recovery?
Thailand, whose economy depends substantially on tourists, has reported 2 million tourists to date this year / Photo: Bloomberg
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There is growing chatter about a US recession. Talking heads have popped up all over the media asserting confidently that the American economy is doomed to contract because its central bank is tightening monetary policy aggressively at a time when the surge in inflation, escalating energy costs and the horrors of the Ukraine war are undermining confidence.

Note that a recession is not just a couple of quarters of falls in GDP as some commentators say but something deeper — a downturn in incomes, employment, industrial production and services output that is prolonged and spread widely across much of the economy.

Our view is that, first, a downturn of such a nature is not pre-ordained for the US. The headwinds that the pessimists point to are real and will certainly slow the economy — but there is no persuasive evidence yet that this slowdown will turn into an outright recession.

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