Gov't and household finances should cushion impact of weak global demand

Schroders' Louisa Lo says a drop in exports will see Asian markets affected by the Western downturn.

While growth in Asia remains significantly more robust than in the Western economies, headwinds will hit export demand and economies such as Taiwan may suffer. However, stronger government and household finances should provide enough fiscal flexibility to cushion Asia from the worst of the impact of weakened global demand. In saying this, concerns closer to home have not gone away. Across the region, the rising price of food and headline CPI is likely to see the tightening cycle extend well into the fourth quarter. However, we do believe inflation will peak in the coming weeks and ...