Elsewhere, Japan could lose further steam, especially as the trade cycle turns. ‘Reopening’ may still have some runway left, it is true, but not sufficiently for a lasting take-off. Korea, too, will feel the chill from cooling exports, while rising interest rates are also starting to bite into the local recovery.
In Australia, growth may still look punchy this year, with booming commodity exports adding to the local lift from ‘reopening’. But, as elsewhere, rising living costs and monetary tightening, plus a wobbly housing market, are bound to sharply curtail growth over the coming year. Property also looks a little shakier across in New Zealand, where growth is similarly decelerating.
India, despite the shock of higher energy prices earlier this year, and still stubborn price pressures, is proving remarkably resilient. Still, growth is set to weaken in 2023, as the tailwinds from ‘reopening’ are starting to fade. Sri Lanka has long endured its travails, but with IMF support beckoning, improvement should soon set in. Bangladesh, rattled by soaring global commodity prices, should continue to prove its resilience through it all.
Indonesia is still riding the commodity boom, although challenges may start to build over the coming year, amid rising prices locally and a sliding current account position externally. Like in Malaysia, growth may start to pull back as the export boom fizzles, even if less so than elsewhere. Thailand, by contrast, will count on tourists to see it through the region’s export stumble, possibly delivering a pick-up in growth in 2023.
The Philippines should cool over the coming months, constrained by large deficits internally and externally where adjustment is needed. Singapore, too, should see growth decelerate as fizzling trade takes its toll, even if services stay robust. Vietnam’s growth should also fall back in 2023, but it looks to remain among the fastest in Asia.