Asia Mid-Year Outlook: Riding Out the Downturn by Glenn Levine, Moody’s Analytics, 24 June 2012
- Production has slowed across Asia in line with the downturn in the global economy
- The second quarter will likely see the business cycle bottom. After a weak third quarter, the recovery will strengthen toward the end of 2012
- A worsening financial crisis in Europe would push Asia into recession
Asia’s economies have slowed through the middle of 2012 as the latest round of global turmoil drags on growth. The global economy remains shrouded in uncertainty, and Asian economies, though insulated from direct financial contagion, are highly dependent on global trade flows.
Local manufacturers are struggling in the face of weak global demand, particularly from Europe but more recently from the U.S. and China. Data improved a little from April to May, but we expect weakness to persist through September before the recovery picks up in the fourth quarter.