Given the unpleasant trends in geopolitics, the global trading system and financial markets, the realistic conclusion should be that the region will face more difficulties in the near future. However, our view is that while conditions are likely to get rougher we should not be overly pessimistic. Remember that bad times tend to create pressures for changes, some of which could be helpful to our region. Policies in the US, China, Europe, Japan and elsewhere are likely to be recalibrated to accommodate the challenges that have emerged. Companies will also revise their business strategies to strengthen their resilience and to exploit new technologies.
The first six months of the year have been tumultuous and yet the impact on our region has been relatively muted. A wider war in the Middle East has compounded the dangers already present with the Ukraine conflict. Shaken by US President Trump’s trade war and other headwinds, global growth is slowing. There has also been more focus on the shakier fundamentals of the US dollar while a hazy view of how new technologies such as AI will affect us compounds the uncertainty.
Throughout all this, Asian economies have remained surprisingly resilient and while regional financial and currency markets have been volatile, they have generally held up well. So, the natural question to ask is, will this resilience hold in the future?
