February 2022 - Macro Indicators
Over one fifth of the world’s population celebrate Lunar New Year on February 1st, 2022 – the most important holiday on the calendar for many Asian cultures, particularly the Chinese. We are heading into a year of the Water Tiger which occurs every 60 years. In China, the tiger is considered the king of all beasts, symbolizing strength and bravery. China is certainly making a strong and brave move at a time when many central banks around the world are taking an increasingly aggressive stance to counter rising inflation. With the U.S. inflation rate reaching a 40-year high, the Federal Reserve (Fed) communicated a hawkish move toward policy normalization in January. By contrast, the People's Bank of China is on a different path and has been easing monetary policies to counter the slowing economic growth. China’s bold move stemmed from its ability to deliver 8.1% GDP growth in 2021, despite the headwinds from the COVID-zero policy and the slowing for-sale residential sector. The second largest economy of the world is not the only country deviating from the U.S. Historically, most central banks in Asia Pacific followed the path of the Fed. However, this time around, several central banks in Asia Pacific are responding to different circumstances. We are heading into a rare territory of diverging global monetary policies. Tse Elysia - Head of Research & Strategy (Asia Pacific)