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Asia Market Outlook 2021: Attractive Opportunities As Economies Rebound

We are constructive on the macroeconomic picture in Asia as the global economy gradually recovers.

In our latest Cyclical Outlook, “Bounded Optimism on the Global Economy” we described our expectations that global output and demand are likely to rebound strongly in 2021, driven by the rollout of vaccines and continued fiscal and monetary policy support. We noted that the Chinese economy, which already operates above pre-crisis levels and has exhibited strong growth momentum into the new year, should record GDP growth above 8% in 2021, after a decidedly subpar 2% or so last year. However, one of the three key risks to our outlook was the likely transition in China from credit easing to tightening in the course of the year.

We expect to see a rebound in the economies of India and Indonesia also during the course of this year, with government stimulus supporting public investment and consumption, although private investment continues to contract. For both countries, the swing factors will be COVID-19 containment and effective vaccination programs.
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The Author

Stephen Chang

Portfolio Manager, Asia

Carol Liao

China Economist

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