Asia Weekly Watch: Is growth slowing?

As flagged in our recent Asia Economic Outlook, second quarter regional activity indicators are expected to slow due to headwinds from high oil prices, supply disruptions in Japan, and financial market tensions in Europe. The data are now bearing this out. Recent indicators in Japan, Taiwan, Hong Kong, and Thailand point to slowdowns in production, exports, or both. That said, we continue to expect a resumption of strong growth trends during the second half of the year, as the soft patch in Q2 helps to alleviate overheating pressures. Meanwhile, with the exception of Vietnam, headline inflation is showing signs of having peaked in a number of economies.

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