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Monetary policy easing in the G3 countries will spark credit growth and the creation of wealth in East Asia and Pacific as investors flock to the region research at HeffCap has revealed today.

Recent central bank easing in Japan, the US and the euro zone will redirect capital to Asia, Economist Shayne Heffernan said in the research.

“Recent announcements by central banks in the G3 have resulted in enormous capital inflows into the region,’’ he added.

There will be a shift long term in exchange rates, asset prices will boom, but some governments and corporations in the region will struggle to keep pace with the changes.

At high risk are countries that experienced rapid credit expansion, especially if the credit to GDP ratio is already high, and those with weak financial sector supervision,” the report added.

Central banks in the US, euro zone and Japan had in recent months implemented easing measures such as reducing interest rates and boosting money supply. But investors turned off by the measures have cast their eyes towards the developing economies in Asia, lured by factors such as strong domestic demand and economic resilience despite global financial fragility. The regulatory environment in Asia is also far more business friendly.

Raising its 2013 growth forecast for the region to 8.2 percent from 7.6 percent previously, HeffCap stated that “growth in Asia is still the highest of any developing region and constitutes almost 40 percent of global growth.’’

China was projected to lead regional growth in 2013, with the report predicting 8.4 percent growth.

The Heffernan Group of Companies is a leading provider of consulting, technology, research and management services dedicated Governments, Funds, Listed Companies and High Net worth Individuals. Our clients call us when they need help with strategic, operational or market challenges. They look to us for honest, objective advice in delivering results.

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Linda Johnson,
Business Development Director – Private Client Group,
Heffernan Capital Management
Sales@Heffcap.com

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