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The State Bank of Pakistan (SBP) today raised interest rates by a further 100bp, which came as little surprise. What was unexpected, however, was the sudden shift in tone in the statement. Despite the worsening inflation outlook and the widening external …
14th December 2021
Rates to stay on hold throughout most of next year The central bank of Taiwan (CBC) is likely to leave interest rates unchanged at its meeting on Thursday (both the consensus and ourselves expect no change), but with the economy operating well-above its …
10th December 2021
Inflationary pressures in the Philippines are easing sharply. This will allow the central bank to keep interest rates low to support the economic recovery. Inflation in the Philippines has been something of a regional outlier, having remained stubbornly …
7th December 2021
We expect the Bank of Korea to continue raising interest rates next year, but the worsening near-term prospects for growth mean the outlook for monetary policy has become less clear cut. Recent economic data from Korea make for disappointing reading. The …
6th December 2021
Rising inflation piles pressure on CBSL The economic situation in Sri Lanka is going from bad to worse, with a surge in inflation undermining the credibility of the central bank (CBSL) and making a debt default all the more likely. Data released earlier …
3rd December 2021
Asian economies, like those elsewhere, have adapted to living with COVID-19 restrictions so that the impact of any tightening would be smaller than it was last year. And unlike in many EMs, there is still room for fiscal and monetary policy to be …
2nd December 2021
Disruption to industrial activity across South East Asia has eased considerably in the past few weeks, helping to relax global supply constraints, especially in the automotive sector. However, a renewed surge in COVID infections in Vietnam deserves close …
1st December 2021
Another record month, exports to stay elevated in near term Korean export values surged to record highs in November helped by temporary factors but also strong underlying growth. Exports should remain elevated for at least the next few months, helped by a …
Post-Delta recovery has further to run November Manufacturing PMIs suggest that the rebound in industry from the Delta wave in South East Asia continued last month, and we suspect it has further to run. The November PMIs released today for eight economies …
Stop-start recovery to continue Korea’s economy is likely to have already rebounded from the downbeat October revealed in activity data today. But prospects for continued improvements have diminished, as a resurgence in virus cases pushes back the …
30th November 2021
Amid all the uncertainty caused by the arrival of Omicron (for our initial thoughts see this Global Update ), one thing we can say with some conviction is that the new variant is further bad news for the region’s beleaguered tourism industry. Up until …
29th November 2021
Recent hikes not the start of Asian tightening cycle Attention over the past week has been on the region’s more hawkish central banks, following rate hikes in Korea and Pakistan . Both countries, along with Sri Lanka (which unexpectedly left rates …
26th November 2021
Today’s move by the Bank of Korea is likely to mark the second hike of at least five, in a tightening cycle that began in August and will extend well into next year. The Bank of Korea’s (BoK) decision to hike its policy rate from 0.75% to 1.00% was well …
25th November 2021
Recovery to pick up pace again Revised Q3 GDP data show that Singapore’s economy grew more strongly than first thought last quarter, and while containment measures mean the recovery is unlikely to have gained much momentum so far this quarter, a gradual …
24th November 2021
Inflation hasn’t emerged as a concern across Emerging Asia in the same way it has in the rest of the emerging world, in part because food price inflation in Asia is much lower, but also because the region has experienced much less disruption from the …
22nd November 2021
Taiwan export orders dropped back in October, but the big picture is that they are down only slightly over the past few months and remain at an elevated level. Looking ahead, we expect demand to weaken, but a backlog of unmet orders means shortages will …
Exports set to see a strong end to the year Korean export values saw continued strength in the first 20 days of November and should remain elevated in the coming months as exporters work through large backlogs of unmet orders. The timely nature of the …
Pakistan’s central bank (SBP) today raised interest rates by an aggressive 150bp and with inflation set to remain above target and the currency likely to come under further downward pressure, further hikes are likely over the coming months. While the …
19th November 2021
Encouraging vaccine progress in South East Asia After a slow start, countries across South East Asia are now making encouraging progress with vaccine rollouts. Malaysia has been the frontrunner and has now fully-vaccinated 76% of its population, but the …
Bank Indonesia (BI) left interest rates unchanged at 3.5% today and appeared to signal that policy rates would remain unchanged for some time yet. A large output gap and weak inflation mean the central bank is in no hurry to follow other EM central banks …
18th November 2021
The central bank in the Philippines (BSP) left its main policy rate on hold at 2.00% today to support the economic recovery, and with GDP still well below its pre-pandemic level, rates are set to remain low for a long time to come. The decision came as no …
Economy to rebound in Q4, but recovery will slow thereafter Thai GDP shrank in the third quarter after the government tightened restrictions and, while the economy should bounce back strongly in the fourth quarter, the speed of the recovery beyond the end …
15th November 2021
Encouraging signs in Malaysia and Vietnam At face value, the 3.6% q/q contraction in Malaysia’s Q3 GDP that was revealed today was fairly gloomy. But the detail showed the economy rebounding strongly by the end of the quarter. The monthly national …
12th November 2021
Economy already rebounding strongly after tough third quarter Malaysia’s economy shrank further in Q3 but was already rebounding sharply by the end of the quarter. With vaccinations high, virus cases down and restrictions being eased, this rebound will …
The Bank of Thailand (BoT) left interest rates on hold today at 0.5%, and the poor outlook for the economy means rates are likely to remain low for some considerable time. Today’s decision was unanimous, and the outcome was correctly predicted by all 21 …
10th November 2021
Strong growth likely again in Q4, but recovery has a long way to go Q3 GDP data were much stronger than expected and output is set to jump again in the fourth quarter following a sharp drop in virus cases and the further easing of restrictions. That said, …
9th November 2021
Transition from coal poses big challenge to Asia If the ambitious targets laid down by the 2015 Paris Agreement to limit the rise in global temperatures to less than 2°C (and preferably 1.5°C) compared to pre-Industrial levels are to be met, then global …
5th November 2021
Indonesia’s economy only shrank slightly last quarter as exports offset much of the hit from a huge outbreak of COVID-19, and with restrictions being relaxed and virus cases now very low, we expect GDP to bounce back strongly in the final quarter. That …
Bank Negara Malaysia (BNM) left its main policy rate unchanged at 1.75% today, and with inflation set to remain subdued, rates are likely to stay on hold at their current all-time low throughout next year. We think financial markets are getting well …
3rd November 2021
Asian exports have continued to grow rapidly despite the recent disruption stemming from lockdowns in South East Asia. A huge backlog of orders and low inventory levels in advanced economies mean that exports are likely to continue to climb steadily …
2nd November 2021
Exports to hold up well in the coming months After another strong month in October, Korean export values are set to remain elevated as high demand for electronics and petroleum products offsets troubles in the auto sector. The timely nature of the Korean …
1st November 2021
Supply backlogs will take time to clear following recovery from Delta wave While October Manufacturing PMIs point to a strong rise in manufacturing output, industry is likely to be working through huge backlogs of orders for many months to come and …
Taiwan’s economy rebounded last quarter but by much less than expected due to a further fall in consumption. But with virus cases now very low and the vaccine rollout gathering momentum, we expect GDP growth to accelerate in the near term. Figures …
29th October 2021
Mixed end to the quarter for Korea The latest batch of activity data from Korea indicate that the automotive sector was hit hard by shortages last month, but that the service sector is enjoying a recovery. The provisional Q3 GDP figures released earlier …
The near-term outlook for South East Asia has improved dramatically over the past month or so. Daily cases of COVID-19 have collapsed and are now less than one-third of the level they were at in August. With vaccination rollouts also making good progress …
27th October 2021
While Korea’s recovery lost some momentum last quarter as the virus weighed on growth, the economy should pick up pace again this quarter as high vaccination levels allow the rolling back of containment measures. The Bank of Korea is unlikely to be …
26th October 2021
Low core inflation will keep the MAS on hold in 2022 While inflation in Singapore is set to rise further over the next few months, both the headline and core rate should moderate in 2022 to well within the Monetary Authority of Singapore’s (MAS) comfort …
25th October 2021
Economic gloom will be temporary The next few weeks will see the publication of a host of third quarter GDP figures from across the region. While the data are likely to paint a downbeat picture, output should rebound strongly in the final quarter of the …
22nd October 2021
Exports climb ever higher Korean export values continue to climb in October driven by both rising prices and growth in underlying volumes. The strength of the external sector adds weight to our view that the economy will expand faster, and the central …
21st October 2021
Overview – Growth in China will weaken further over the coming year as a downturn deepens in industry and construction. The outlook for the rest of the region is improving. We expect many economies to rebound strongly as governments ease restrictions on …
20th October 2021
Taiwan export orders rose in September, indicating that demand for Asian electronics remains strong. We expect final demand to weaken over the coming months, but shortages are likely to persist for some time to come. Taiwan’s export orders deserve close …
Bank Indonesia today left its policy rate unchanged at 3.5% and signalled that it is likely to leave rates on hold for a prolonged period of time. With the economy rebounding but inflation set to stay low, we think interest rates will be left on hold …
19th October 2021
Asia reopens While international travel in the rest of the world is making a steady recovery, tourism across Asia remains on its knees. In Mexico, international arrivals are now roughly 80% of their pre-crisis level, while in Spain the equivalent figure …
15th October 2021
The Monetary Authority of Singapore (MAS) tightened policy today, as it looked past the lacklustre rebound in GDP last quarter and looked to curb further rises in inflation. Core inflation is unlikely to rise substantially next year, even as the recovery …
14th October 2021
After leaving rates on hold today, the Bank of Korea gave strong signals of its intent to hike again in November. And given the Bank’s hawkish comments, we are adding another rate hike into our forecast for next year, bringing the total to a further 75bps …
12th October 2021
What rising energy prices mean for inflation The recent jump in energy prices will put upward pressure on inflation across the region, but the impact should prove short lived and is unlikely to worry policymakers. In some places inflation is already …
8th October 2021
Korean consumer prices saw another strong m/m rise last month, and while we don’t think this is a major cause for concern it still adds weight to our view that the central bank will hike rates again later this year. Data released today show that while the …
6th October 2021
With cases of COVID-19 in Vietnam falling sharply and the government easing restrictions, factories are starting to reopen, and the latest data suggest the worst is now over for the country’s manufacturing sector. However, with backlogs of work mounting …
5th October 2021
Pacquiao throws his hat into the ring The next presidential election in the Philippines is not until May, but the contest is already generating plenty of headlines with former boxing world champion Manny Pacquiao (PacMan to his fans) this week announcing …
1st October 2021
Few signs of disruption to exports Korean export values remained close to an all-time high in September and look to have provided a decent boost to growth over the quarter as a whole. The timely nature of the Korean trade data makes them a good bellwether …
