Down but not out. Although Asia-Pacific’s pace of expansion has declined over the past few years or so, the region’s growth continues to be the highest in the world after the global financial crisis. Moreover, exports–the main growth engine in some economies–have waned. With ultra-low interest rates generated by major central banks, lending has surged in some Asian economies, providing–at least for now–an offset to weaker external demand. Add to this mix slower growth in the two Asian giants, China and India, and we believe the region is unlikely to return to pre-crisis growth even if the advanced economies–particularly the United States–recover smartly.
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