East Asian economies should remain robust through the next year, despite the lending crisis in the United States, helping global exchange traded fund (ETF) investors. Banks do warn that the problems imposed by the mortgage crisis, mixed with the credit tightening, blended with higher oil prices, could hinder East Asia’s growth somewhat. Gillian Wong for AOL Money & Finance reports that the region’s rapid growth is also reducing poverty, but income inequality is rising.
Japan should grow around 2% this year, and 1.8% in 2008. China is projected for 11.3% in 2007, and 10.8% into next year. Middle class in Southeast Asian economies is expected to grow this year, with a 5-7% range.
The mortgage crisis will be reflected in Asia by heightened uncertainty and reassessment of risk, evidenced by stock market declines. The region’s financial institutions have limited direct exposure to U.S. subprime mortgages. As the area’s economies grow, this should help the ETFs that follow them. While there is not an ETF that represents each of the East Asian countries, there is China, Japan, Malaysia, Hong Kong, South Korea, Singapore and Taiwan.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.