Assessing The Near-Term Fortunes Of Asia Pacific F&D Markets

Global headwinds in the US and eurozone are increasingly clouding the near-term economic prospects of the Asia Pacific region. With external demand facing similar threats across the Asia Pacific economies, we believe regional domestic economies are unlikely to escape unscathed from a sharp correction in exports and investment. That said, we stress that the impact of a broader economic slowdown on domestic demand will vary across the regional economies. In domestic demand-oriented economies such as Malaysia and Vietnam, consumers are looking to be in a better shape to shoulder the burden of growth. On the other hand, economies such as Australia and China are not only facing softening external demand conditions, they are also grappling with domestic woes of declining property prices, which will put the brakes on consumer confidence and domestic demand in 2012.

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