Get ready for Goldilocks phase in 2021

ASIA ex-Japan economies have staged a gradual recovery from the trough in the first half of this year. We expect the region to transition from a below-trend growth phase in 2020 to a "Goldilocks" phase in 2021.

This 2021 Goldilocks phase would see a combination of three building blocks: accelerating and above-trend growth; rising but still benign inflation; and "big easy" policy.

On the first building block of our Goldilocks view, there have been doubts about the pace and sustainability of the growth recovery, particularly as daily new Covid-19 cases have not improved in a straight line and reopening plans have not proceeded in a linear fashion as there has been some tightening in measures in different places.