Happy New Year ! The tapering has officially begun with the Fed's announcement in the latest meeting. This is no doubt an indication that economic fundamentals in the US continued to improve in 2013. While the tapering could have a temporary effect on capital outflow to the emerging economies, the return of growth in the developed countries (particularly in Europe) should enhance the trade outlook in 2014 for much of Asia Pacific. Therefore, export related sectors should perform well while their knock-on effect will benefit domestic demand. With the exception of Japan and Australia, interest rates in most Asian countries could face upward pressure if growth exceeds market expectations. Consensus Economics (as of December 2013) projects a growth rate of 4.7% Year-on-Year (y/y) for the total Asia Pacific region for 2014, and an increase of 6.2% y/y for Asia excluding Australia and Japan.
Source : CBRE Global Investors