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Mixed economic outlook in Asia as West recovers: Deutsche Bank

The economic recovery in the US and Europe is expected to have a positive impact on Asia, according to Deutsche Bank's Asia Chief Economist Michael Spencer. However, he also warned that some regional currencies in Southeast Asia could face downward pressure.

SINGAPORE: The economic recovery in the US and Europe is expected to have a positive impact on Asia, according to Deutsche Bank's Asia Chief Economist Michael Spencer.

Speaking to reporters on the sidelines of at an industry conference, he also warned that some regional currencies in Southeast Asia could face downward pressure.

That is because some bond markets -- particularly those in Southeast Asia -- could continue to see outflows as the US Federal Reserve scales back its bond-buying programme and US bond yields rise in line with a strengthening economy.

Mr Spencer added: "In ASEAN, where you have Indonesia, possibly the Philippines, suffering more from fixed-income related outflows, I think you're more inclined to see weakness in currencies.

"That will tend to have spillover effects on Malaysia and Thailand, and Singapore of course."

Mr Spencer also said that the re-emergence of manufacturing in the US, brought on by cheaper energy prices, is unlikely to severely impact Asia's key tech manufacturing economy due to the region's well-developed supply chains.

Sectors that will see pressure are petrochemicals and plastics. 

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