Summary

• Growth in Asia has proven relatively resilient, but inflation risks are building as elevated energy prices and food supply risks persist.
• With upside inflation pressures dominating, regional monetary policy is likely to shift further towards tightening.
• In Korea, we expect inflation to rise further despite government measures, reaching around 3% as early as June, while steady wage gains are strengthening the case for a Bank of Japan rate hike in June.

By Deepali Bhargava, Regional Head of Research, Asia-Pacific

Better-than-expected growth despite energy headwinds

Growth across developed Asia continued to outperform in the first quarter and is expected to remain resilient in the second quarter, driven

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