Asia's economic growth will get back on track in 2023 owing to the region being home to some of the fastest-growing economies in the world, according to Mike Shiao, chief investment officer - Asia ex Japan at Invesco.
Within Asia, India is one of the fastest-growing economies and - Shiao said - likely to deliver GDP growth in the high-single-digit and with an average growth higher than other Asia countries, over 2022 to 2023, contributing a significant portion to Asian and global growth.
He added: “We see huge potential for growth in India which can lead to diverse investment opportunities.
“We expect China, the world’s second-largest economy, to reopen in 2023 gradually. In its quest to focus on high-quality growth and achieve a moderately prosperous society, we expect China's GDP to stabilize at mid-single-digit in the next few years.
"Although China's growth is likely to be lower than the 10 per cent growth in earlier years, this stable growth level can still provide a supportive environment for bottom-up stock selection."
Shao said within North Asia, Taiwan and Korean markets have been impacted by softening global demand.
In addition, the equity valuations in these two economies have lowered to comfortable levels.
Both Taiwan and Korea’s economies are also very competitive in the technology sector, Shao noted.
Korea specializes in producing Dram (dynamic random-access memory) chips, while Taiwan has strong capabilities in manufacturing a wide range of semiconductor chips.
Shao added: “We believe that the cyclical slowdown of the tech sector is a short-term phenomenon. We plan to closely monitor and hope for a potential re-rating of the sector in 2023.
“We also believe the potential reopening of China can benefit the country’s domestic market and be an extra driver for Asia’s overall growth. A rebound in China’s pent-up domestic demand is expected to result in a strong boom in trade, exports, and growth in neighboring Asian countries.”