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Robust Economic Growth to Support Sector Outlooks: Economic growth in APAC will generally remain strong in 2024, especially in emerging markets (EMs), supporting sector outlooks across the region. We expect real GDP to expand by, or above, 5% in India, Indonesia, the Philippines and Vietnam, and China’s performance will still be strong by most other countries’ standards. Headwinds from slower Chinese growth, weak global demand and higher interest burdens following the rise in interest rates over 2022-2023 will weigh on performance for many sectors, but the bulk of our APAC sector outlooks for 2024 remain neutral. Diverging Prospects for EM and DM Banks: Growth in APAC EMs should buoy loan demand and limit the potential adverse effects on asset quality from interest rates, which we believe have largely peaked across the region. The peaking of the rate cycle will affect APAC developed market (DM) banking sectors more than those in EMs. We expect net interest margins (NIMs) and non-performing loan ratios to come under pressure in DMs in 2024, but the degree of weakening will generally be modest.