Asia: Modest economic recovery in 2020 – ANZ

ANZ analysts suggest that their economic outlook for Asia in 2020 is for a modest recovery, driven by an upturn in the global tech cycle and more expansionary fiscal policies.

Key Quotes

“The recovery will be uneven, with China continuing its structural slowdown and India still struggling with financial sector stresses and weak rural demand.”

“Monetary policy easing is now at its tail end. We expect further rate cuts in China, India, Indonesia, and the Philippines.”

“After a challenging 2019, the outlook for Asian currencies is more promising in 2020. We are most constructive on the THB, TWD, and PHP.”

“In the local currency bond space, we expect total returns to moderate. Cheaper funding costs will anchor the front end yield curves for those markets where we expect rate cuts and/or liquidity injections. Longer-dated yields will remain caught in the cross-currents of modest growth recovery expectations and fiscal expansion on one hand, and the resilience of onshore structural demand for duration assets on the other.”