Morgan Stanley FixedAsia Economics The Viewpoint 亚洲经济研究：观点 若降息推迟，又当如何？

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - Inflation rates in Asia are declining, leading to an increase in real interest rates, with expectations for nominal rate cuts starting in June-July 2024 [2][3][11] - The strong US dollar and the re-evaluation of the Federal Reserve's interest rate path have delayed rate cuts by Asian central banks [3][11] - Improvement in external demand and positive spillover effects on capital spending are expected to mitigate the adverse impacts of rising real interest rates [3][11] - The report anticipates that central banks will begin to lower nominal rates, bringing real rates closer to pre-COVID levels [3][11] - Risks include potential delays in rate cuts until 2025 if the Federal Reserve postpones its own cuts or if oil prices rise significantly [3][20][21] Summary by Sections Inflation Trends - Core inflation in Asia (excluding Japan) is showing a downward trend, with approximately 80% of Asian economies having inflation rates at or below central bank targets [6][7] - Core inflation rates in most Asian economies are now at or below their respective central bank targets, indicating progress towards price stability [6][7] Real Interest Rates - Real interest rates in Asia (excluding China and Japan) have reached 1.7%, slightly above the pre-COVID five-year average of 1.5% [11][14] - The increase in real interest rates is occurring against a backdrop of improving external demand, with export growth showing positive momentum [14][15] Capital Expenditure and Economic Growth - The report highlights that historical trends suggest that improving export growth positively influences capital spending in Asia, particularly in trade-oriented economies like South Korea and Singapore [16][17] - In India and Indonesia, structural factors are expected to support capital expenditure growth, with India's GDP growth forecast raised from 6.5% to 6.8% for FY2025 [16][17] - The report notes that high-frequency indicators of capital spending in Asia have bottomed out in Q2 2023, suggesting a potential recovery [16][17] Scenarios for Rate Cuts - If the Federal Reserve delays rate cuts until Q1 2025, it would likely lead to a postponement of rate cuts by Asian central banks, resulting in a slight slowdown in economic growth [20][21] - A scenario where oil prices rise to $110-120 per barrel could increase inflationary pressures, leading to further delays in rate cuts by Asian central banks [20][21][22]