We believe idiosyncratic credit events may occur over the next 12 months, but systemic bank risk is remote.
EM as a whole stands to potentially benefit from China’s post-pandemic economic reopening, with differentiation among individual countries as global trade allegiances shift.
China’s central government puts high-quality growth as top priority, along with continued support for business and opening-up.
As the COVID-19 recovery continues, we expect Asia’s growth-inflation dynamics to diverge from the rest of the world, led by China’s long-awaited economic reopening.
China’s introduction of comprehensive support for its real estate sector could provide some cyclical relief amidst longer-term headwinds, but new COVID-19 waves cloud the outlook.