Growth set to slow, interest rates to remain low

The poor prospects for domestic demand across large parts of Emerging Asia mean that regional growth is likely to slow over the next couple of years. However, provided exports continue to grow at a decent pace, the slowdown should be gradual. With growth set to ease and inflationary pressures subdued, Asian central banks look set to keep monetary policy loose. In contrast to the consensus, which is expecting rate hikes in most countries next year, we think policy rates will be left on hold, or in a few cases, cut further. We expect both currencies and equities to experience another good year in 2018, while bond yields are likely to remain low.