Why Asia’s inflation scare may be overstated: a Morgan Stanley economist explains
Rising bond yields and renewed inflationary pressures are raising concerns about Asia’s growth outlook. But could the region’s investment boom offer a more positive story? Find out why Asia’s capex surge could help drive stronger growth.
Australia and Singapore both posted hotter than expected inflation this week. The Philippines and South Korea responded by raising rates. And all eyes are on Fed Chair Kevin Warsh’s remarks at Jackson Hole against a backdrop of stubborn US inflation and elevated bond yields. It would be easy to read the headlines and conclude Asia is bracing for a genuine inflation shock. Derrick Kam has a more measured view.
In this episode of Market Focus Weekly, a podcast from The Business Times, Nicole Teo speaks with Derrick Kam, Asia Economist at Morgan Stanley, about what is actually driving Asia’s growth and inflation dynamics right now, and why the picture is considerably more nuanced than the recent data prints suggest.
Why listen
- Why seven out of twelve Asian economies still have inflation within central bank targets Kam explains why the region’s inflation outlook is not as alarming as recent headlines imply, and what his forecast actually shows through 2027.
- Why central banks are responding to growth, not just inflation Korea, India, Taiwan and Malaysia are more likely to tighten policy because their growth is strong, not purely because of supply shocks. Kam unpacks this shift in how to read central bank behaviour.
- Why Asia’s capex boom is bigger than AI alone Energy, defence spending and industrial onshoring are all part of a supercycle Kam expects to push regional capex from US$11 trillion to US$16 trillion by 2030.
- Why Singapore is on track for a third consecutive year of 5 per cent growth Kam explains why the recovery base is broadening well beyond tech exports.
The data looks concerning at first glance but the full picture tells a different story. Listen now.
Discover more episodes at bt.sg/podcasts. Got feedback? Email us at btpodcasts@sph.com.sg.
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Written and hosted by: Nicole Teo (nicolet@sph.com.sg)
With Derrick Kam, Asia Economist, Morgan Stanley
Edited by: Nicole Teo & Claressa Monteiro
Produced by: Nicole Teo & Chai Pei Chieh
A podcast by BT Podcasts, The Business Times, SPH Media
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ABOUT THE PODCAST
Market Focus Weekly distils the week’s key market moves and economic drivers across Singapore and the region. Hosted by Emily Liu, it delivers expert analysis and forward-looking insights every Friday. It is perfect for investors who want an audio briefing on the week’s investment landscape and what could move markets next.
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