Asia: Fiscal policy is making a comeback – ANZ

ANZ analysts suggest that the pace of deceleration in Asian exports is finally starting to ease and a meaningful turnaround that can revive investment remains elusive.

Key Quotes

“Slowing growth in China and the US alongside a moderate improvement in the global semiconductor cycle continue to present strong headwinds.”

“Against this backdrop, monetary easing remains in vogue. The problem, however, is in its effectiveness. Accordingly, fiscal policy is slowly but surely becoming an integral part of the counter-cyclical policy arsenal in several economies.”

“In view of the above, Asian currencies are likely to tread on the weak side. Meanwhile, the rates environment remains favourable in the region’s high-yielding economies.”