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The View | China downturn, Israel-Hamas war, US election strife – is 2024 already doomed?
- Between China’s property crisis, continued tightening by central banks, surging oil prices amid the Israel-Hamas war and US political dysfunction, it’s hard not to wonder if next year might already have been written off by investors
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This crazy roller coaster of a year still seems to have some spills and thrills in store for Asia in the home stretch to 2024 – all too many, perhaps.
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Between China’s deepening property crisis, continued US Federal Reserve tightening and surging oil prices as Hamas and Israel wage war, it’s hard not to wonder if the year ahead might already be a wash for Asia and investors hoping to harness the region’s growth prospects.
Take Japan, where government officials and economists are busily lowering projections for 2024. Just a couple of months back, Tokyo was abuzz with optimism about its best recovery in a decade and the Nikkei Stock Average trading at 30-year highs, winning big bets from Warren Buffett and his ilk.
Traders were convinced, meanwhile, that the Bank of Japan (BOJ) would soon begin exiting more than 20 years of quantitative easing – but not any more. China’s downshift is unleashing deflationary forces at a moment when Asian economies are relying on their top trading partner to act as a growth engine.
When asked why the BOJ isn’t tapering or preparing to raise interest rates, governor Kazuo Ueda has taken to signalling that it all depends on China. So has Bank of Korea head Rhee Chang-yong.
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These U-turns in 2024 prospects in Tokyo and Seoul are emblematic of pivots taking place across Asia. The default risks bedevilling China’s property sector have officials in Bangkok, Jakarta, Kuala Lumpur, Manila, Singapore and beyond bracing for a turbulent year ahead.
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