C16149 Tigers and Cubs Analysts


Our top 5 Asia economists define Asian countries into two sets - striving cubs and ageing tigers.

Classifications like these are never perfect, but overall, our Asia cubs/tigers distinction closely matches the divergent contributions of domestic demand to GDP growth in Q2 (Fig 1) and Asia league table rankings (Fig 2).

To better understand why we believe this Asia cubs-tiger divide is a growing theme in the years ahead, we present comparative data on their vulnerabilities, opportunities and investment outlooks. Cubs have fewer vulnerabilities and more opportunities. Private credit in the tigers is twice that of the cubs, as is the tigers' export exposure to a cooling China. The tigers have had weak domestic demand, while the cubs have had larger lifts in their sovereign credit ratings since 2010. Opportunities for the cubs also include cheaper labor, abundant youth and low urbanization.  We are also optimistic on the investment outlook for the cubs - we see an investment boom in the making, buoyed by much stronger economic fundamentals and growth than the global EM benchmark. The rising allure of the cubs is starting to show up in actual FDI inflows, which is a key driver to lift the cub's relatively low investment-to-GDP ratio. The ongoing global reach for yield should also help attract foreign investment to the cubs.


View the full report here for the 2016 - 2018 outlooks for the following countries:

Australia, China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand.