Asia Pacific: Macro snapshot August 2022
The outlook for the whole Asia Pacific region remains threatened by both the domestic repercussions of high inflation and the danger to Asia’s exports from weakening demand in United States and Europe, according to Oxford Economics.
China’s property sector remains stuck in crisis and it's likely to be another six months or so before the country’s approach to COVID changes significantly. These risks threaten to drive 2023 growth forecast below 5 percent.
The backdrop suggests stagnating industrial output and exports during the second half of 2022 and early 2023. Indeed, exports lost momentum across the region in July. On the plus side, however, some sectors may get a modest boost from easing supply-chain problems.
For most in the region, well above-normal levels of inflation are prompting central banks to tighten policy. Both Thailand and Indonesia started to hike interest rates in August, despite large negative output gaps, while the Philippines hiked by a