Thursday, October 21, 2021
Home Business Moody's Analytics on Covid outbreaks in Asia, Fed rate hikes in 2023

Moody’s Analytics on Covid outbreaks in Asia, Fed rate hikes in 2023


Asian countries have to tame the current waves of the coronavirus outbreak in order to get their economies ready for future rate hikes by the U.S. Federal Reserve, an economist said Monday.

Fed officials last week indicated that interest rate hikes could come as soon as 2023, shifting from earlier comments in March that said the U.S. central bank was not expecting any increases until at least 2024.

Higher U.S. rates would lure investors from abroad, and central banks in other countries may have to raise their own rates in defense. Raising interest rates could help countries prevent too much capital from leaving their economies, but increasing rates too quickly heightens the risk of an economic slowdown.

“Asian countries have to get Covid under control so that once the Federal Reserve does begin raising interest rates, the economies here are in good stead and can manage the transition as well,” Steve Cochrane, chief Asia-Pacific economist at Moody’s Analytics, told CNBC’s “Squawk Box Asia.”  

Cochrane predicted that the U.S. central bank might raise interest rates by 25 basis points once every quarter starting 2023. The so-called dot plot of individual Fed member expectations pointed to two hikes that year.

Asian countries have to get Covid under control so that once the Federal Reserve does begin raising interest rates, the economies here are in good stead and can manage the transition as well.

Steve Cochrane

Chief APAC economist, Moody’s Analytics

Many economies in Asia including Japan, Taiwan and Malaysia have in recent months seen a renewed surge in Covid cases — which forced authorities to impose stricter social-distancing measures. The fresh waves of infections come as vaccination progress in the region lags that of the U.S. and Europe.

The World Bank said in a report this month that economic output in two-thirds of East Asia and Pacific countries will remain below pre-pandemic levels until 2022. Factors that dampen potential economic growth in those countries include extended Covid outbreaks and a collapse in global tourism, said the bank.

Cochrane pointed out that Covid outbreaks across the region are “staunching” domestic demand and keeping inflation moderate.

The economist said several Asian countries including China, South Korea and Singapore are ramping up Covid vaccinations. “That’s looking good but that has to continue going forward,” he said.

But other countries including Thailand, Indonesia and the Philippines have not effectively controlled the outbreak and don’t have strong vaccination programs yet, added Cochrane.

— CNBC’s Jeff Cox contributed to this report.



Source link

RELATED ARTICLES

India is close to turning the pandemic tide: Poonawalla

The country had administered 87.60 crore doses of SII’s Covishield Covid-19 vaccine till Wednesday.Adar Poonawalla, CEO of Serum Institute of India (SII), expects...

Amy Roloff Reveals Loss of Beloved Rescue Dog: “I’m Still So Sad”

Amy Roloff has shared some tragic news with her followers. Last month, just two days before one of the happiest days of her life,...

Josh Duggar Suffers ANOTHER Legal Setback as Judge Allows Video Evidence to Be Presented In Court

From the moment that Josh Duggar was arrested on child pornography charges back in April, the former reality star's guilt seemed obvious to...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

India is close to turning the pandemic tide: Poonawalla

The country had administered 87.60 crore doses of SII’s Covishield Covid-19 vaccine till Wednesday.Adar Poonawalla, CEO of Serum Institute of India (SII), expects...

Amy Roloff Reveals Loss of Beloved Rescue Dog: “I’m Still So Sad”

Amy Roloff has shared some tragic news with her followers. Last month, just two days before one of the happiest days of her life,...

Josh Duggar Suffers ANOTHER Legal Setback as Judge Allows Video Evidence to Be Presented In Court

From the moment that Josh Duggar was arrested on child pornography charges back in April, the former reality star's guilt seemed obvious to...

Danielle Staub Claims She Was Danielle STABBED by Teresa Giudice

Despite leaving the franchise years ago, Danielle Staub has had a lot to say about her time at Bravo. She's taken shots at Andy...

Recent Comments