War in Ukraine, record fuel and food prices and rising interest rates are stoking the threat of stagflation but at least one region is positioned to avoid the worst of the downturn: south-east Asia.
Across the globe, investors are selling stocks in anticipation of higher interest rates and potential recession. The US Federal Reserve last week raised rates by more than expected in a bid to tame prices while China’s punitive zero-Covid strategy has depressed demand in the world’s second-largest economy.
South-east Asia, however, looks set to largely escape the stagflationary cycle of high inflation and cratering output. In four of the six biggest economies in the Association of Southeast Asian Nations, gross domestic product is rising faster than inflation, a Financial Times analysis of government data has found.