Pandemic disrupts APAC FDI, but prospects remain positive
We believe prospects for FDI inflows into APAC over the medium term remain strong, even though pandemic-driven supply disruptions and uncertainties over the pace of recovery may see some firms rethink their supply chains.
What you will learn from this report:
- We expect China to remain the top destination for FDI given its rapidly growing domestic market. And as supply chains continue to adjust to higher labour costs in China and trade protectionism, we anticipate SEA, notably Vietnam, to be the key beneficiary.
- The region is well established in global supply chains, and its labour dynamics and openness to trade and FDI remain very favourable.
- We rank the advanced Asian economies as some of the least attractive destinations for FDI due to relatively unfavourable labour dynamics. Plus, most have launched tighter screening since the pandemic, dampening FDI. That said, we expect these economies to remain important sources of FDI in the region.”
Finland’s growth forecast cut amid weak confidence and soaring inflation
We have lowered our 2022 GDP growth forecast for Finland to 1.5% from 1.7% last month, as weakening confidence further dampens the outlook. We expect inflation to peak higher with a greater passthrough to core prices, squeezing real incomes and denting consumption. Russia has accounted for almost 10% of Finland's goods trade, among the highest in Europe.Find Out More
Why we see eurozone inflation slowing sharply next year
We have revised our 2022 eurozone inflation forecasts sharply higher, to 6.0%, since the start of the Ukraine war, as energy and food prices began to soar and new supply bottlenecks emerged. That said, we still see inflation decelerating sharply to 1.3% in 2023, putting us below consensus. While we recognise significant risks to our views, inflation should slow to below 2% in H2 2023.Find Out More