UBS expects Asia to register a moderate 2H recovery to around 4.9% GDP growth this year, compared to the near 1% growth expected in the US and Europe. However, this is unremarkable compared to pre-pandemic trend growth of around 5.5%.
Asia’s economic recovery is expected to outperform the rest of the world in a solid yet “unspectacular” fashion in the second half of the year, driven by domestic demand, falling inflation and supportive monetary conditions, according to UBS Asia mid-year outlook 2023 report.
This follows the region’s robust 1H2023, which saw bull markets in Taiwan, South Korea and Japan despite rapid central bank tightening and US banking stresses. Moving forward, macro conditions appear firmly tilted in Asia’s favour, while developed markets are likely to be bogged down by the cumulative effects of monetary tightening in the coming quarters.
