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Foreign Direct Investment

Overall, growth in Emerging Asia – Southeast Asia, China and India – is projected to remain robust in 2017. Growth in many ASEAN countries and China has picked up on a strong trade rebound and resilient domestic consumption, while growth in India has edged downwards owing to taxation and monetary reforms. The region’s growth is also projected to remain solid in the medium term. While growth will slow in China, it is expected to stay brisk in India. Southeast Asia is poised to maintain strong growth momentum from 2018 to 2022 on robust domestic private consumption and infrastructure initiatives planned by a number of governments. The external positions of Emerging Asian economies have remained generally solid, although recent current account trends vary and net inflows of foreign direct investment (FDI) have weakened in some countries. Monetary authorities in the region are maintaining an accommodative monetary policy, anchored on benign inflation, despite recent manifestations of renewed price pressures. Coupled with the perception that risk is low, this is supporting optimism in financial markets. Meanwhile, fiscal policy in many economies has been expansionary and looks set to continue as such in the near term with planned increases in infrastructure spending. A widening fiscal gap may be a concern in certain economies, but positions are generally stable.