Asia: Who stole my domestic demand? – RBS

Research Team at RBS, suggests that Asia’s trade-driven mini-cyclical upturn is coming to an end and however, the domestic cycle is in no place to step up in most countries.

Key Quotes

“We look into the reasons behind the lacklustre consumer and investment cycles. Weak wage growth, excessive debt and declining wealth have combined with excess industrial capacity to cool output growth. Only India, Indonesia and the Philippines are credible and, even so, selective exceptions.

For this reason we continue to “prefer countries with endogenous growth drivers over those more exposed to global growth, i.e. long INR, IDR and PHP vs. short SGD, KRW, TWD and THB”.”