Emerging markets in South-east Asia have good prospects in the second half of 2022 in spite of macro headwinds including US inflation, geopolitical tensions and appearances of new Covid-19 variants, said Manulife Investment Management in a news release on Thursday (Jan 20).
The wealth and asset management segment of Manulife Financial Corporation noted that rebuilding inventories and lower supply chain disruptions will help boost a more sustainable recovery this year, compared to the “pent-up rebound” of 2021. “The biggest concern remains weak consumer demand which will be exposed by the looming downturn in export growth. On the other hand, Asia’s milder inflation expectation comes down to one simple factor – trade surpluses.
However, the report warned of potential challenges in the first half of 2022 as inflation is set to remain “uncomfortably high” for the early months of the year. High inflation cannot be addressed by interest rate policies as they are likely to be driven by global supply issues and may rest on global liquidity, which is “crucial for Asian growth”.