Central banks in Indonesia and India, with the worst-performing currencies among Asian emerging markets this year, will face more challenges in 2013 as they balance inflation risks with the need to boost growth.
East Asian countries are poised to report gross domestic product data that may mark the bottom of the region’s slowdown, as signs of a recovery in China and the U.S. herald a revival in demand for exports.
Central banks in Southeast Asia may be forced to abandon this year’s monetary easing and raise interest rates before their north Asian peers in 2013, as rising inflation risks overshadow the current economic gloom.
Vietnam needs to eliminate its balance-of-payments deficit and stabilize its foreign reserves at an adequate level before an upgrade of the nation’s credit rating outlook, Moody’s Investors Service said.
Malaysian Prime Minister Najib Razak’s efforts to build support ahead of national elections may spur more handouts to the poor and bonuses for civil servants, limiting progress in reducing the 2013 budget deficit.