JULYASIA BUSINESS OUTLOOK9US FED'S INTEREST HIKES & ITS IMPLICATIONS ON ASIA BUSINESSESThe business environment in Asia Pacific differs greatly between developed and emerging countries. Due to well-developed financial and ITC sectors, as well as favourable trade policies and tax environments, Hong Kong, Singapore, Japan, and South Korea are ranked among the top places to do business globally. Meanwhile, due to rapid manufacturing and industrial expansion, China and India are regarded as global economic growth drivers; however, bureaucratic barriers, corruption, widespread poverty, and skill shortages pose challenges to development.Emerging Markets of Asia-PacificEmerging and frontier financial markets in the Asia-Pacific region have experienced significant changes in recent years in areas affecting regulation, market participants, and products. This collection presents perspectives from authors in local markets who provide their analysis of the history, current development, and future outlook for 11 countries: Bangladesh, Cambodia, India, Indonesia, Malaysia, Mongolia, Pakistan, the Philippines, Sri Lanka, Thailand, and Vietnam. The brief should be particularly valuable for prospective investors interested in learning about regulatory developments, market structure, and financial history in the region.An Effort to Combat Stubbornly High InflationTo combat inflation, the Federal Reserve of the United States decided to bite the bullet and raise lending rates by 75 basis points (bps).This is the Fed's most aggressive rate hike in 28 years. According to reports, the Fed last raised rates by 50 basis points twice in a non-consecutive cycle in mid-1994.The latest rate hike is the third since March and the first of many more to come as the world's largest economy struggles to keep inflation under control, which reached a 40-year high last week. In March 2022, the US Federal Reserve approved a 25 basis point rate increase, its first since December 2018. It then raised interest rates by 50 basis points in May. Fed chairman Jerome Powell told a news conference that the unusual rate hike will be an exception rather than the rule going forward: "From the perspective of today, either a 50 basis point or a 75 basis point increase seems most likely at our next meeting. Clearly, today's 75 basis point increase is an unusually large one, and I do not expect moves of this size to be common".Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher IMPRESSIONS
< Page 8 | Page 10 >