World Economy

Tough Times Ahead for Asia

Tough Times Ahead for AsiaTough Times Ahead for Asia

Japanese investment bank Nomura has predicted a difficult 2016 for countries in Southeast Asia, not including Japan. According to Nomura, the growth of Asia’s emerging economies will stall at 5.7% in 2016, which will be the region’s slowest pace since 1998. “With interest rates cut to record lows in many countries and oil prices halving, who would have thought Asia’s growth would slow for five years in a row,” Rob Subbaraman, Nomura’s chief economist for Asia outside Japan was quoted by Channel NewsAsia as saying. While Beijing is predicted to continue its monetary and fiscal easing policy, this will not be enough to boost the growth of the world’s second-biggest economy, according to Nomura. “These easing policies are more to contain the pace of slowdown. Hence, we are forecasting 5.8% growth for China next year”, Subbaraman said. This will have a domino effect on other Asian countries that have strong trade links with China. Another reason for slower growth is the aging population that is “creeping up much faster than anyone realized.”