The recovery of the global economy will continue but at a slower pace compared to the past two quarters, and should avoid falling back into recession, according to analysts at Credit Suisse.
Ms. Fan Cheuk Wan, the bank’s head of Asia Pacific research, said that while some fear that another decline in the global economy may occur after a series of job losses and a decline in the world manufacturing sector, she believes that such predictions are “overly pessimistic”.
According to Ms. Fan, several economies hit a speed bump in the first half this year due to many problems coming out of Europe. But Mr. Joseph Tan, chief economist at Credit Suisse, said its effect on Asia is “next to zero”, because the countries most hit by the crisis, including Greece, Spain and Portugal, make up only four percent of Asian exports to Europe.
“As long as core Europe [France, Germany and the Netherlands] can hold itself up, we should focus on the US and not be overly concerned about Europe,” said Mr. Tan.
Asia is also protected with low debt to GDP ratio, with most Asian nations having ratios below 40 percent, while Europe and US struggle with ratios more than 100 percent.