Asia’s export growth may slip into negative territory in early-2023

ASIA’S export growth is likely to slump from its mid-teens to the low single-digits by the end of this year, and fall into negative territory in early-2023, as demand from China, the US and Europe slows down, economists warn.

According to Nomura, China’s credit impulse -  the ratio of new credit to gross domestic product (GDP) flows - is pointing to a continued slowdown. China’s credit impulse has been a reliable leading indicator of turning points in Asia’s export growth cycle. Past cycles have shown that the spillover effects from China to the rest of Asia have a lag of about 14 months.   

Economists Sonal Varma and Toh Si Ying said: “This reflects the importance of China’s own demand in driving Asian exports, but also its indirect effects on global industrial cycles and commodity prices.”