Filtered by Subscriptions: Asia Economics Use setting Asia Economics
Thailand: rates unchanged on Wednesday GDP figures published from across Asia over the past few weeks confirm that Thailand’s recovery from the pandemic has been the slowest in the region. (See Chart 1.) A steady increase in tourism arrivals should …
2nd June 2022
Cost pressures remain high, signs of easing disruption in China Manufacturing PMIs for May suggest that cost pressures remain high, but there were more encouraging signs on the external front, with new export orders showing signs of stabilising. …
1st June 2022
Talks between Pakistan and the IMF ended last week without agreement, but the subsequent decision by the government to cut back fuel subsidies has cleared one of the major hurdles towards a deal being agreed. Financial markets in the country reacted well …
30th May 2022
Singapore inflation climbs higher Rising inflation and a strong economy have fuelled talk that monetary policy in Singapore will need to be tightened further. But we think the backdrop will have changed by the time the Monetary Authority of Singapore …
27th May 2022
The decision by the Bank of Korea (BoK) to hike its policy rate by 25bps, to 1.75%, is likely to be followed by more hikes to tackle elevated inflation. But the Bank is set to turn more dovish further ahead. Today’s unanimous move was no surprise, with …
26th May 2022
The decent upwards revision to Q1 GDP data reveals that the economy gained more momentum at the end of the quarter, a trend which is likely to carry on throughout Q2. The second estimate of Q1 GDP shows that output grew by 0.7% q/q after a 2.3% rise in Q …
25th May 2022
Bank Indonesia (BI) left interest rates unchanged today and the dovish tone from the press conference suggests the central bank is in no rush to tighten policy. We are maintaining our view the central bank will raise interest rates by just 25bps this …
24th May 2022
High inflation and the fall in the currency were the two key factors behind the State Bank of Pakistan’s (SBP) decision to raise interest rates by a further 150bp today. More tightening looks inevitable, and much will depend on whether the government can …
23rd May 2022
China the exception China today cut interest rates, but the notable recent shift across the rest of the region has been an embrace of rate hikes. Central banks in India , the Philippines and Malaysia have all hiked for the first time this cycle in recent …
20th May 2022
The central bank in the Philippines (BSP) started raising interest rates today, but with inflation set to slow later in the year and the economic recovery likely to weaken, the tightening cycle is set to be gradual and relatively short. We were among 14 …
19th May 2022
Despite surging global food and fuel prices, inflation across most of Emerging Asia looks set to remain relatively low. This is the key reason why tightening cycles in the region will be much more gradual than elsewhere. Inflation has risen across …
17th May 2022
Following continued growth in the first quarter, the pace of the recovery will largely depend on how quickly tourists return now that the country has fully reopened to foreign visitors. GDP grew by 1.1% q/q in Q1, down from the 1.8% expansion recorded in …
Encouraging Q1 data, but headwinds growing The past week has brought a flurry of GDP releases, with most countries in Asia now having reported GDP data for the first quarter. (See here .) The figures have been encouraging. Despite a surge in virus cases …
13th May 2022
Strong first quarter will be followed by continued recovery Malaysia’s economy continued to rebound strongly at the start of this year and should grow at a decent pace throughout the rest of 2022. That said, there is still a long way for the recovery to …
Growth strong, for now The Philippines economy beat expectations again in Q1 and should have gained further momentum in recent months. But we suspect the strength of the recovery will begin to wane soon. GDP grew by 1.9% in seasonally-adjusted q/q terms, …
12th May 2022
Bank Negara Malaysia (BNM) raised its main policy rate earlier than many had expected today, but given low inflation and a continued need to support the recovery, we still think that the tightening cycle will be much more gradual than markets expect. …
11th May 2022
The resignation yesterday of the prime minister, the postponement of talks with the IMF, surging inflation and the collapse of the currency are just some of the many problems facing Sri Lanka. In this Update , we answer five key questions about the …
10th May 2022
Ferdinand “Bongbong” Marcos Jr. is eager to resume the “Build Build Build” infrastructure programme of his predecessor and pursue closer ties with China. Extra spending on infrastructure would be welcome and could provide an important boost to the …
9th May 2022
Growth slowed in Q1 as Omicron held back the recovery at the start of the quarter. Activity is rebounding now that the economy has reopened, but other headwinds are growing. We estimate that the 5.0% y/y growth reported today for the first quarter is …
Jump in inflation likely to be temporary Interest rates in the Philippines look set to rise soon, but the tightening cycle is likely be gradual. Figures published earlier this week show that headline inflation in the Philippines increased from 4.0% y/y in …
6th May 2022
Asia’s export-focussed industry softens further, more weakness ahead. Regional Manufacturing PMIs point to a further worsening of industry conditions, chiming with Korean trade data which suggest a major softening of external demand. Both reinforce the …
3rd May 2022
Central banks across the region have recently turned more hawkish. Over the past month or so, policymakers in Korea, Taiwan, Singapore, Sri Lanka, India and Pakistan have all tightened policy. Governor Benjamin Diokno in the Philippines has also hinted …
29th April 2022
Indonesia export ban may prove short lived Indonesia has caused turmoil in global commodity markets over the past week with its decision to ban exports of palm oil. The country is the biggest palm oil producer in the world, accounting for over 50% of …
Overview – Our GDP growth forecasts are generally above the consensus, but with higher commodity prices and weaker global demand set to weigh on economic recoveries, growth across much of Emerging Asia will be slower than we had anticipated in our last …
28th April 2022
A further pickup in exports drove continued strong Taiwanese GDP growth in Q1, but we expect the economy to lose momentum over the coming quarters as the external sector weakens and COVID-19 weighs on consumer spending. GDP grew by 1.56% q/q in the first …
A rebound is already underway following the economic hit from Omicron, which today’s provisional Q1 GDP figures show was relatively mild. But, after an initial pick up in Q2, we expect the recovery to slow as headwinds to growth mount. That should see the …
26th April 2022
Softer trade figures a sign of things to come There are growing signs that demand for the region’s exports are starting to soften, a trend we expect to continue over the coming months. Figures published on Wednesday show that Taiwanese export orders …
22nd April 2022
Bank Indonesia (BI) left its main policy rate unchanged at 3.5% at its meeting today, and the relatively benign outlook for inflation means the tightening cycle is likely to be very gradual. The decision to leave rates on hold came as little surprise …
19th April 2022
Pakistan – new government faces major challenges It has been a tumultuous week in South Asia. On Saturday, Imran Khan lost a vote of confidence and was replaced as prime minister on Monday by Shehbaz Sharif . The new PM faces a difficult balancing act as …
14th April 2022
Today’s decision by the Bank of Korea (BoK) to hike its policy rate by 25bp to 1.50% is unlikely to mark the end of its tightening cycle given the strength of inflationary pressures. We expect at least two more 25bp rate hikes in the coming quarters, …
The Monetary Authority of Singapore (MAS) tightened monetary policy again at its meeting today. With growth set to remain strong and core inflation likely to stay elevated, we expect the MAS to maintain its tight policy stance for at least the next couple …
We held a Drop-In on the political and economic problems facing Pakistan earlier today (see an on-demand recording here ). This Update answers some of the most common questions that we received. Question 1: What have we learned about the new prime …
13th April 2022
Sri Lanka’s decision today to suspend payments to bond holders is designed to pave the way for a deal with the IMF and an orderly rescheduling of its debts. The diverse array of creditors to Sri Lanka could make a debt restructuring programme difficult to …
12th April 2022
The main challenge facing Shehbaz Sharif, who today replaced Imran Khan as prime minister of Pakistan, is stabilising the economy. The key to achieving this is a deal with the IMF. The price for any further support will be a further tightening of fiscal …
11th April 2022
Prime Minister loses case in Supreme Court A change of leadership in Pakistan looks likely this weekend, calling the future of the country’s IMF deal into question. Yesterday, the Pakistani Supreme Court ruled unconstitutional the dissolution of the …
8th April 2022
So far, the spill overs from the COVID outbreak in China to the rest of Asia look to have been relatively minor. But the possibility of major disruption to supply chains remains a large and growing risk. The China Caixin Services PMI was released today …
6th April 2022
A constitutional crisis in Pakistan threatens to scupper its deal with the IMF, which would throw its already-precarious external situation into very dangerous territory. Meanwhile, political meltdown in Sri Lanka, where an external crisis is already well …
4th April 2022
Omicron hit to be even smaller than first thought GDP data released over the next month or so are likely to show that recoveries continued everywhere across the region (excluding China) in Q1. That’s despite the fact that almost all countries set fresh …
1st April 2022
Tough times ahead for Asia’s export-focussed industry While Korean trade data show exports remained buoyant, regional Manufacturing PMIs point to lost momentum. With headwinds to export-focussed industry mounting, there are tougher times ahead. March PMIs …
The Bank of Thailand (BoT) left interest rates unchanged at its meeting today and suggested that it would continue to look through a temporary rise in inflation to support the economic recovery. We are sticking with our view that the central bank will …
30th March 2022
Successful vaccination campaigns allowed governments to keep economies open during the recent Omicron waves, and our Mobility Trackers suggest that activity held up much better than we had originally anticipated. Indeed, GDP figures for Vietnam published …
29th March 2022
Economy resilient but headwinds growing Vietnam’s economy recorded solid growth in the first quarter of the year as the economy brushed off the impact of the Omicron wave, but while we expect the recovery to continue over the coming months, new headwinds …
Doves in the ascendency Dovish comments from policymakers over the past week support our view that central banks in South East Asia will buck the trend of global tightening and leave interest rates unchanged over the coming months. The central bank in the …
25th March 2022
Yesterday’s easing of virus restrictions in Singapore exceeded what we had expected, and now means the risks to our above-consensus growth forecast of 4.0% this year are to the upside. The measures are also likely to add to inflationary pressures, further …
The central bank in the Philippines (BSP) left its main policy rate on hold at 2.00% today and will be in little hurry to tighten policy in the months ahead, with supporting the economic recovery set to take priority over combatting inflation. Today’s …
24th March 2022
Sri Lanka has no easy choices left as it looks to dig itself out of its economic mess. Outright default or a financing deal with China remain options, but the government appears to be favouring an agreement with the IMF. The policy tightening and …
23rd March 2022
Taiwan new export orders picked up again in February, but we don’t expect this strength to continue as high oil prices start to weigh on consumer spending around the world. Meanwhile, the risks to global supply chains from COVID-related disruption have …
21st March 2022
More rate hikes despite Omicron surge New daily cases of COVID-19 in Korea hit a high of over 600,000 on Thursday, and over the past week an average of just under 1% of the population has been testing positive for the virus every day. This is one of the …
18th March 2022
Taiwan’s central bank (CBC) today unexpectedly raised its main policy rate by 25bps to 1.375%, but we doubt this is the start of an aggressive tightening cycle given the mounting downside risks to growth and the relative weakness of inflation. We had …
17th March 2022
Bank Indonesia (BI) left interest rates unchanged at 3.5% at its meeting today, and the weakness of inflation and strong performance of the rupiah mean the tightening cycle is likely to be very gradual. The decision came as little surprise and was …
