HSBC warns downside risks in Asian economy

14:08, November 16, 2010      

Email | Print | Subscribe | Comments | Forum 

As Asian economy was barreling ahead, downside risks including higher interest rates in advanced economies and a slowdown in exports were still worth keeping an eye on, said HSBC in a research paper released late Monday.

Asia, more than ever, has received enormous flows from fixed income investors, desperate for yield they couldn't find in the United States and Europe, said Frederic Neumann, co-head of Asian Economics Research of HSBC, in the paper.

"It's important to note the risk of higher interest rates in advanced economies and, concurrently, strength in the U.S. dollar."

HSBC also warned that since Asia has benefited equally from soaring exports as well as domestic demand for its economic development, a possible deceleration of exports next year, may weigh on growth across the region and lead investors to revisit assumptions about Asian's prospects.

"Exports to the U.S. and Europe still matter, and any hiccup there would send painful ripples back into Asia."

Accelerating inflation in the region is another risk after the United States launched a new round of quantitative easing measures, which may lead to wobbles of the dollar and eventually kill domestic demand in Asian countries, the paper said.

The risks of another surge in prices are rising in Asia, and Asian central bankers may then be forced to tighten precipitously, eventually driving consumers and firms to cut back on spending, Neumann said .

"A hard landing, echoing events of 2008, can no longer be ruled out."

Source:Xinhua

(Editor:黄蓓蓓)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Chinese Navy soldiers hold an evening party marking the upcoming 62nd National Day aboard Chinese Navy hospital ship "Peace Ark" in the Pacific on Sept. 28, 2011. The Chinese National Day falls on Oct. 1. (Xinhua/Zha Chunming)
  • Photo taken on Sept. 30, 2011 shows the crowd at the plaza of Beijing Railway Station in Beijing, capital of China. The railway transportation witnessed a travel peak with the approach of the seven-day National Day holidays on Friday. (Xinhua)
  • A man wearing high-heel shoes takes part in the 3rd annual Walk a Mile in Her Shoes, an event when men literally walk in women's shoes to raise awareness about ending violence against women, at Yonge-Dundas Square in Toronto, Canada, Sept. 29, 2011. (Xinhua/Zou Zheng)
  • Photo taken on Sept. 29, 2011 shows a cargo ship in danger on the sea near Zhuhai City, south China's Guangdong Province. Cargo ship Fangzhou 6 of Qingzhou of southwest China's Guangxi Zhuang Autonomous Region lost control after water stormed into its cabin due to Typhoon Nesat on the sea near Zhuhai Thursday, leaving 12 crew members in danger. Rescuers rushed to the ship and saved them by using a helicopter. (Xinhua)
  • Actress Gong Li poses for L'Officiel Magazine. (Xinhua Photo)
  • Demonstrators from the Occupy Wall Street campaign hold placards as they march in the financial district of New York September 29, 2011. After hundreds of protesters were denied access to some areas outside the New York Stock Exchange on September 17, demonstrators set up a rag-tag camp three blocks away. Zuccotti Park is a campground festooned with placards and anti-Wall Street slogans. The group is adding complaints of excessive police force against protesters and police treatment of ethnic minorities and Muslims to its grievances list, which includes bank bailouts, foreclosures and high unemployment. (Xinhua/Reuters Photo)
Hot Forum Discussion