Trends to Watch

  1. Weaker inflation

    Inflationary pressure will continue to decline on the back of weaker global demand, lower energy and food prices and improving supply chain efficiency. Australia, New Zealand and India are the only major Asia Pacific economies forecasted to see inflation reach 5% or more in 2023, with that in other markets expected to pull back to under 3.5%.
  2. Peak interest rates

    The Fed Funds Rate is projected to peak at around 5.0% in mid-2023, ending the steepest rate hike cycle in history. Further interest hikes in major Asia Pacific markets are not expected to exceed a total of 100 bps in 2023, with Japan and mainland China the exceptions in keeping rates low.
  3. Mainland China-led recovery

    Asia Pacific GDP is forecasted to grow by 3.6% in 2023, maintaining the pace set in 2022. Performance across the region will be polarised, with growth in mainland China set to pick up to 4.9%, but expansion in the region’s mature economies including Australia, Japan and Singapore forecasted to fall to sub-2.0%.

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