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Weaker growth ahead as headwinds mount The Philippines economy rebounded sharply in the third quarter of the year, but we expect growth to slow over the coming months as high inflation, rising interest rates and weaker global demand weigh on prospects. …
10th November 2022
Slower growth ahead Economic growth in Indonesia accelerated in the third quarter, but this is likely to be as good as it gets. We expect lower commodity prices, tighter monetary policy and elevated inflation to drag on growth over the coming quarters. …
7th November 2022
As good as it gets Economic growth in Indonesia accelerated in the third quarter, but this is likely to be as good as it gets. We expect lower commodity prices, tighter monetary policy and elevated inflation to drag on growth over the coming quarters. …
Risks have been building for a while Commercial interest rates in Korea have continued to rise over the past week despite aggressive intervention by the authorities as they struggle to calm the markets. (See Chart 1.) While the recent jump in borrowing …
4th November 2022
Malaysia’s central bank (BNM) raised its main policy rate by 25bp (to 2.75%) today, but with inflation falling and growth set to slow, we think the tightening cycle is nearing an end. Today’s move came as little surprise and was accurately predicted by …
3rd November 2022
BNM closing in on the finish line Malaysia’s central bank (BNM) raised its main policy rate by 25bp (to 2.75%) today, but with inflation falling and growth set to slow, we think the tightening cycle is nearing an end. Today’s move came as little surprise …
Asian manufacturing to remain weak Manufacturing PMIs across the region were downbeat in October owing to weak external demand and a deterioration in the employment outlook. We expect manufacturing to remain subdued, as weaker global demand, elevated …
1st November 2022
Central banks across the region have been stepping up the pace of intervention in foreign exchange markets to support their currencies, resulting in a drop in FX reserves. In most countries, reserves are down by around 10% from their recent peaks, and …
31st October 2022
What to expect in 2023 We published our latest Emerging Asia Economic Outlook this week, which contains our detailed forecasts. Here are three key calls from the report. Sharp slowdown ahead Growth across Emerging Asia looks set to slow sharply over the …
28th October 2022
Taiwan’s economy returned to growth in Q3, after the Omicron-induced slump in the second quarter, but we expect growth to weaken considerably over the coming quarters as exports struggle and the reopening boost to domestic demand fades. According to …
Growth to weaken sharply in coming quarters The economy returned to growth in Q3, after the Omicron-induced slump in the second quarter, but we expect growth to weaken considerably over the coming quarters as exports struggle and the reopening boost to …
GDP growth in Korea slowed sharply in the third quarter of the year, and we think the economy will remain weak over the coming quarters as higher interest rates and weaker export demand weigh on prospects. According to figures published today, GDP growth …
27th October 2022
Further weakness ahead GDP growth in Korea slowed sharply in the third quarter of the year, and we think the economy will remain weak over the coming quarters as higher interest rates and weaker export demand weigh on prospects. According to figures …
Vietnam’s central bank (SBV) hiked its main policy rate by a further 100bp (to 6.0%) yesterday at an unscheduled meeting as it attempted to support the currency. With the dong likely to remain under downward pressure, further hikes are likely. …
25th October 2022
Overview – Economic growth in most countries looks set to slow sharply next year as weaker exports and higher interest rates weigh on activity. With price pressures starting to ease, we expect central banks to begin to shift their focus from containing …
24th October 2022
Decent Q3 growth Korean GDP figures due on Thursday are likely to show that the economy held up reasonably well in the third quarter of the year. We have pencilled in growth of 0.4% q/q. While this would represent a slowdown compared with the 0.7% …
21st October 2022
Economists from across our Asia teams were online for this 20-minute briefing on the region’s big investment stories. During this session, the team answered client questions about what’s happening in Asian economics and markets as they addressed current …
20th October 2022
Bank Indonesia today raised its main policy rate by 50bp (to 4.75%), and further rate hikes are likely in the near term as the central bank looks to support the currency and clamp down on inflation. A rate hike today was always likely, the only question …
BI has more work to do Bank Indonesia today raised its main policy rate by 50bp (to 4.75%), and further rate hikes are likely in the near term as the central bank looks to support the currency and clamp down on inflation. A rate hike today was always …
Zero-COVID to hold back tourism recovery China’s 20 th Party Congress gets underway on 16 th October. With General Secretary Xi’s continued dominance in little doubt, it is unlikely to result in any substantial change in policy direction. This …
14th October 2022
The Monetary Authority of Singapore (MAS) tightened policy today, in an attempt to contain elevated price pressures, but with inflation likely to fall in the coming quarters and the economy set to struggle, we expect this move to have marked an end to the …
The decision by the Bank of Korea to raise its policy rate by a further 50bp (to 3.0%) indicates the central bank’s near-term focus will remain on combating inflation. But with growth slowing and price pressures already having peaked, we think the …
12th October 2022
BoK hikes rates again, but tightening cycle drawing to a close The decision by the Bank of Korea to raise its policy rate by a further 50bp (to 3.0%) suggests the central bank’s near-term focus will remain on combating inflation. But with growth set to …
Central banks have the tools to deal with liquidity crises arising from rising interest rates and falling asset prices. Instead, the bigger threat is that higher interest rates produce large and simultaneous falls in asset prices that threaten the …
11th October 2022
BoK to take cautious approach The consensus is expecting the Bank of Korea (BoK) to increase its policy rate by 50bp at its scheduled meeting on Wednesday. But with the economy slowing sharply, we think a 25bp hike is more likely. A weakening currency …
7th October 2022
Continued worries about inflation mean the central bank (BoK) in Korea still has further work to do, and we are sticking with our view that the BoK will raise interest rates by at least 50bp between now and the end of the year. But with inflation likely …
5th October 2022
Asian manufacturing to remain weak Manufacturing PMIs across the region were downbeat in September, as new export orders declined again. We expect conditions to remain subdued, as weaker global demand, high inflation and tighter monetary policy continues …
3rd October 2022
Ugly trade data, about to get worse The most recent trade data out of Asia have been very weak, and with the global economy heading for recession, we think the worst is still to come. There has been no shortage of bad news recently for the region’s …
30th September 2022
Bank Indonesia (BI) has been stepping up its efforts to support the rupiah in recent weeks, and we think further FX intervention and interest rate hikes are likely over the coming months as the central bank continues to try and defend the currency. …
29th September 2022
Economy resilient but headwinds growing Vietnam recorded another quarter of strong growth last quarter, and while higher interest rates will act as a drag on demand, strong export demand should ensure the economy continues to outperform. Vietnam’s …
The Bank of Thailand (BoT) hiked interest rates today by a further 25bp (to 1.0%) and appears committed to raising interest rates gradually over the coming months. But with inflation elevated and the currency coming under further downward pressure against …
28th September 2022
Thailand: central bank may need to accelerate the pace of tightening The Bank of Thailand hiked interest rates today by 25bp (to 1.0%), but with inflation elevated and the currency coming under further downward pressure, we think the central bank will …
A strong US dollar is a threat to countries with lots of foreign currency debt and/or inflation problems, and is putting pressure on central banks across the region to raise interest rates more aggressively. We recently changed our policy rate …
27th September 2022
Inflation and currency key concerns for SBV Central banks stepped up tightening cycles across the region this week, with hikes in the Philippines, Indonesia (both 50bp) and Taiwan (12.5bp). There was also an unscheduled move from the central bank …
23rd September 2022
Taiwan’s central bank (CBC) today raised its main policy rate by 12.5bp (to 1.625%), and with inflation easing and growth set to struggle, further tightening is likely to be gradual. Today’s move came as little surprise and was predicted by 16 of 22 …
22nd September 2022
Bank Indonesia (BI) today raised interest rates by a further 50bp (to 4.25%) and signalled that more tightening was likely as it aims to support the currency and clamp down on rising inflation. We are changing our policy rate forecasts, and now …
Further tightening to be gradual Taiwan’s central bank (CBC) today raised its main policy rate by 12.5bp (to 1.625%), and with inflation easing and growth set to struggle, further tightening is likely to be gradual. Today’s move came as little surprise …
The central bank of the Philippines (BSP) today raised its main policy rate by another 50bp (to 4.25%), and signalled that more hikes were likely in the near term. While further tightening is likely over the coming months, with inflation having peaked …
New interest rate forecasts for Indonesia Bank Indonesia (BI) today raised interest rates by a further 50bp (to 4.25%) and signalled that further tightening was likely as it aims to clamp down on rising inflation. While a rate hike today was never in …
Further hikes likely in the near term, but tightening cycle to be over by end-2022 The central bank of the Philippines (BSP) today raised its main policy rate by a further 50bp (to 4.25%), and signalled that further hikes were likely in the near term. The …
Policymakers worried by falling won The Korean won has continued to fall against the US dollar over the past week and is now at its lowest rate against the greenback since the 2008-09 Global Financial Crisis. It has fallen by 15% against the dollar since …
16th September 2022
Monetary policy makers across Emerging Asia remain in hawkish mode – every central bank in the region with the exceptions of China and Vietnam has now raised interest rates this year – and further hikes are likely over the next couple of months. …
15th September 2022
Inflation to reach 7% later this year We are adjusting our inflation and policy rate forecasts for Indonesia in response to the recent fuel price hikes. The 30% increase in the price of gasoline and diesel that was announced earlier in the week is aimed …
9th September 2022
Malaysia’s central bank (BNM) today raised its main policy rate by 25bp (to 2.5%), and signalled that further hikes were likely over the coming months. However, with inflation set to fall back later in the year, we think the tightening cycle will be …
8th September 2022
Further tightening to be “measured and gradual” Malaysia’s central bank (BNM) today raised its main policy rate by 25bp (to 2.5%), and with inflation likely to remain elevated, further hikes are likely. Today’s move came as little surprise and was …
Inflation concerns easing Inflation and activity data published over the past few days have surprised to the downside, supporting our view that Korea’s tightening cycle will finish by the end of the year. Headline inflation in Korea fell back from 6.3% …
2nd September 2022
Today’s announcement of a deal between the IMF and Sri Lanka brings some long overdue good news and provides a potential route out of the crisis. But the economy is not out of the woods yet. The money may not actually be dispersed for many months, and …
1st September 2022
Regional manufacturing weakens again Manufacturing PMIs across Asia fell back again in August, with the readings for Taiwan and Korea especially weak. We are not expecting any improvement over the coming months, with weaker global demand, high commodity …
With this week’s flash PMIs from major economies signalling that demand is tailing off rapidly, the upcoming August trade data from Korea, due Thursday, will give a timely signal of how Asian exporters are faring. We had expected evidence of fading …
26th August 2022
