PIMCO’s Cyclical Outlook for Asia: Awaiting the Policy Breakthrough

A new Economic Outlook Q&A with Tomoya Masanao, Robert Mead and Ramin Toloui is now available on pimco.com.

PIMCO’s Cyclical Outlook for Asia: Awaiting the Policy Breakthrough

· The cyclical economic outlook for 2013 is unusually dependent upon whether we see a structural policy breakthrough somewhere in the world.

· Our base case for China includes incremental policy reform, but we also see an increased chance of a potential positive surprise on reform, resulting from the recent changes in leadership.

· Japan’s new government will likely focus on reflating the structurally impaired economy, but policy effectiveness will remain questionable.

· Australia is being burdened by the unintended consequences of the policy responses of others, accompanied by the impending rebalancing of the Chinese economy.