Headed by chief Asia economist Chetan Ahya, Morgan Stanley’s crew advances from second place to claim No. 1 for the first time since 2011, ending Bank of America Merrill Lynch’s reign at three years. The seven analysts, who work out of Hong Kong, have been publishing research that evaluates the region’s economies within a framework of the structural macro challenges posed by high debt, weak demographic forecasts and disinflation. This so-called 3-D challenge, one fund manager observes, “has worked out very well — and they do a good job of updating it.”Ahya explains that the “headwinds of the 3-D challenge” have persisted for some time. If current trends continue, 2016 will mark the sixth consecutive year of a growth slowdown in Asia ex-Japan countries. Seven of the ten economies have debt ratios equivalent to nearly 200 percent of gross domestic product, or greater, he notes. In addition, the “Asia Six” countries — China, Hong Kong, Singapore, South Korea, Taiwan and Thailand — are facing a “rise in age dependencies” as their total numbers of potential workers shrink, says the 47-year-old leader, and nine out of ten nations are struggling with deflationary producer prices. “We think that the challenge of debt, demographics and disinflation is most intense for the Asia Six countries,” while India, Indonesia and the Philippines are largely exempt from these issues. To prevent a “sharper deceleration in growth,” he reports, policymakers have embarked on a series of modest steps to stimulate their economies, such as trimming rates and increasing government spending. However, Ahya and his colleagues do not foresee aggressive stimulus efforts, forecasting instead interest rate cuts of roughly 12.5 to 50 basis points over the next 12 months. They project that regional economies’ fiscal deficits will rise slightly, from 3.6 percent of real GDP last year to 3.9 percent in 2016, while output is likely to decelerate, from 6.1 percent to 5.9 percent. “The experience of Japan in the 1990s could serve as a useful framework and would be more relevant for analyzing the events in the region today,” Ahya concludes.