Is an Asian Economic Slowdown Really That Terrible?

Posted by John on March 20th, 2020

We all know that the Asian economy has been nothing less than a powerhouse over the last decade. Asia is coming alive, and it is doing so with remarkable power and strength. Could it be that this dependence on strong growth has made some Asian investors a little too nervous? This article explains how even a few tiny bumps in the road cannot derail what is currently a powerful rise in the Asian economy.

All Good Things Must Come to an End

Investors in Asia seem to have their finger on the trigger when it comes to pulling out. They see massive returns, and yet are still waiting for the bubble to burst. Early 2020 saw rewards from the Thailand economy showing that it had the slowest growth in five years thanks to a strong Thai Baht, and they are predicting a rocky road ahead, yet there is no reason why their economy shouldn't keep thriving into the next decade. Their slowest rate of growth is 2.4%, which is hardly the foreshadow of an economic downturn.

Any Excuse For a Natural Slowdown

Asia has to ease off the gas at some point, and Donald Trump's rebuilding of America has lowered the profits that larger Asian companies are making, giving room for smaller businesses and new investments in Asia. This is a natural slowdown, but people are so unwilling to accept it that even Reuters is blaming slower Indonesia economy growth numbers on the Coronavirus, rather than accepting that the Indonesia economy needs room to breathe and grow if it is to continue its albeit steady march upwards.

Good News for Vietnam

The United Kingdom is fervently opposed to trade with Vietnam due to Vietnam's awful human rights record, but the UK has now left the EU. Plus, Donald Trump has turned his steely gaze from China and onto the EU where he intends to further American interests. This is all good news for Vietnam since the EU has struck a trade deal. The contract is the most extensive ever the EU has agreed with an emerging market.Big things are expected in the not-too-distant future for the Vietnam economy. This is also yet more proof that fighting for UK and US interests seems to have the odd byproduct of benefiting the Asian continent.

Singapore is Already in Bed with the EU

The Singapore economy is already seeing the benefits of a trade deal with the EU as the same thing described above with Vietnam has already happened with Singapore. Decreased tariffs have helped Singapore export more goods after Singapore was the first country in South East Asia to strike a deal with the EU, and the same effect is expected with Vietnam.

India is Still Winning More Than Cricket Tournaments

You would have had to have your head under your pillow to have missed just how well the Indian economy is doing. The Indian economy growth has been oddly motivated, almost as if they had secret assets nobody knew about. Their rise to power has now become so strong that they have leapfrogged the UK and France to become the fifth largest economy in the world.

Sustainability and infrastructure are still problems, but it is hard to deny that India has been on a winner since Tony Blair went in and de-escalated the conflict between India and Pakistan in the 90s. There is still a lot of worrisome military activity between these two noisy neighbors, but their peaceful coexistence (compared to earlier years) has really helped the Indian economy stretch its legs and flex its muscles.

If you want to learn more about Asian economies, go to www.asiafundmanagers.com