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Overview – Surging infections across South East Asia and the slow progress of vaccine rollouts mean that COVID-19 will continue to cause widespread economic disruption across large parts of the region until at least the end of the year. We have cut our …
20th July 2021
Virus cases surge in South East Asia The virus situation across South East Asia has gone from bad to worse over the past couple of weeks (see Chart 1), with Indonesia, Thailand, Malaysia and Vietnam all reporting a record high number of daily cases. The …
16th July 2021
The Bank of Korea (BoK) left its main policy rate on hold at 0.50% today and signalled that a rate hike is still very much on the table this year. While the worsening virus situation has made things more uncertain, comments from the press conference …
15th July 2021
Recovery to get quickly back on track The economy stumbled in Q2 after the government reimposed restrictions in response to a spike in virus cases, but with new infections down and the government rolling back containment measures, the recovery should …
14th July 2021
Singapore rebounding as restrictions are lifted The government in Singapore is starting to ease restrictions, and the success of the country’s vaccination programme will hopefully allow a rapid return to normality. This should set the stage for a decent …
9th July 2021
The fact that Bank Negara Malaysia (BNM) left its policy rate on hold at 1.75% today despite the poor economic outlook means any further loosening is unlikely. But with the recovery set to be slow and fitful, we think BNM will leave interest rates at …
8th July 2021
Thailand’s reopening Thailand’s tourism sector will remain heavily depressed despite this week’s reopening of Phuket to foreign tourists. Since Thursday, fully-vaccinated foreigners have been allowed to visit the island without needing to quarantine …
2nd July 2021
Exports strong but close to peak After a strong end to the month, Korean export values reached a fresh all-time high in June. But with some signs external demand is levelling off and semiconductor shortages are biting, we suspect goods export values are …
1st July 2021
Industry conditions looking less rosy The June PMIs dropped back as virus outbreaks and supply chains issues created mounting headwinds for industry. With neither issue likely to be resolved soon, the rapid growth in industry over the past few quarters …
The virus situation in Emerging Asia has improved compared with a month ago. Although cases are rising sharply in Indonesia, daily numbers have come down in Taiwan, Singapore, India and Malaysia, and appear to have stabilised in the Philippines. That …
30th June 2021
Virus outbreak taking its toll Looking past the jump in y/y growth due to a weak base for comparison, GDP data suggest that Vietnam is facing a heavy economic toll from its efforts to control the virus. With sporadic outbreaks continuing, the economy is …
29th June 2021
Korea to hike rates in August We were already more hawkish that the consensus in expecting a rate hike in Korea this year, but recent comments by the central bank and strong economic data mean we are shifting forward our forecast for the first hike to the …
25th June 2021
The central bank in the Philippines (BSP) left its main policy rate on hold at 2.00% today, but with inflation fears receding, more rate cuts to support the beleaguered economy are only a few months away. The BSP has been on hold so far this year after …
24th June 2021
The Bank of Thailand (BoT) today left interest rates unchanged at their all-time low of just 0.5%, dovish comments from the press conference support our view that rates will be on hold for a long time to come. Interest rates have now been left unchanged …
23rd June 2021
There are tentative signs that global demand for Asian consumer goods has peaked. But with demand for key components still running well ahead of supply, shortages are likely to persist for some time to come. Taiwan’s export orders deserve close attention …
21st June 2021
Exports close to their peak Korean export values look set to dip in June after a record high in May. We suspect goods export values have peaked. The timely nature of the Korean trade data makes them a good bellwether for the health of the export sector …
Bank of Korea closer to pulling the trigger Minutes from the Bank of Korea’s (BoK’s) May meeting, released on Tuesday, support our view that the central bank will tighten policy this year. The minutes were decidedly hawkish, with one of the seven members …
18th June 2021
Taiwan’s central bank (CBC) left interest rates unchanged today at 1.125% despite the booming economy. With inflation relatively subdued and the currency at multi-year highs against the US dollar, we suspect the CBC will be in little hurry to start …
17th June 2021
Bank Indonesia (BI) left its policy rate unchanged at 3.5% today and signalled that it was in no rush to adjust its monetary policy settings again this year. We expect rates to remain low to support the recovery for some considerable time. The decision …
Signs of hope in Thailand The past week in Thailand has seen a number of encouraging developments, but it is too early to start raising our GDP growth forecasts. First, the bad news. The virus situation remains worrying. New daily cases of COVID-19 are …
11th June 2021
Another strong month Korean export values dipped a little at the start of June after a record high in May, but external shipments remain well above their pre-crisis level and should continue to boost GDP growth. The timely nature of the Korean trade data …
Taiwan’s economy is struggling with severe capacity constraints but there are few signs in recent data that this is fuelling broad-based wage or price pressure. That’s a stark contrast with the US, and should provide some reassurance to central bankers …
10th June 2021
Korea: vaccines to supercharge the recovery Thanks to a fresh batch of supply, Korea has administered nearly three million jabs in the past seven days, covering over 5% of its population. (See Chart 1.) And there are hopeful signs that this pace will be …
4th June 2021
Exports on renewed upwards path Korean export values surged to an all-time high in May, suggesting that the external sector will drive GDP higher once again this quarter. The timely nature of the Korean trade data makes them a good bellwether for the …
1st June 2021
Surge in industry softens slightly, but sector still going strong The May PMIs softened slightly but were still mainly consistent with improvements in manufacturing sectors. Strong global demand for electronics will continue to support output over the …
Despite the worsening virus situation and the announcement of a “total lockdown”, Malaysia’s economy is likely to hold up relatively well, as booming exports offset the hit to private consumption. We are only nudging down our GDP growth forecast for this …
31st May 2021
With the economy rebounding strongly from the crisis, the Bank of Korea (BoK) is starting to shift its attention away from supporting growth and towards containing financial risks. We expect the BoK to begin raising interest rates at its meeting in …
What do high oil prices mean for inflation? The price of Brent crude has risen to almost US$70pb over the past week as prospects for an imminent easing of US sanctions on Iran have fallen. A decline in US crude stocks also helped to push prices higher. …
28th May 2021
The Bank of Korea (BoK) left its main policy rate on hold at 0.50% today and given that the recovery still has a way to go, the BoK is likely to leave policy accommodative for at least the next few quarters. But concerns about financial stability are …
27th May 2021
The economic outlook for much of Emerging Asia has deteriorated in recent weeks in response to a sudden jump in COVID-19 infections. Daily cases are surging in Thailand and Malaysia, and while the overall numbers remain low, Taiwan, Singapore and Vietnam …
26th May 2021
Bank Indonesia (BI) left interest rates unchanged at 3.5% today and signalled that it was in no rush to adjust its monetary policy settings again this year. We expect interest rates to remain low to support the recovery for some considerable time. The …
25th May 2021
Recovery to resume at a decent pace in the second half of 2021 Revised Q1 GDP data show that Singapore’s economy grew more strongly than first thought at the start of 2021. While a resurgence in virus cases is likely to drag on GDP this quarter, this …
External trade to continue boosting GDP A common theme across the Q1 GDP data released over the past month has been the boost still being provided by exports. Data released on Monday showed that despite a tightening of restrictions and a jump in COVID-19 …
21st May 2021
Taiwan’s economy is being buffeted by several apparently unconnected shocks – a drought, power outages and an outbreak of COVID-19. But they are all linked to severe capacity shortages resulting from the extraordinary strength of global electronics …
Exports on renewed upwards path Korean export values are likely to surge to an all-time high this month. A buoyant external sector looks set to prop up GDP again this quarter. The timely nature of the Korean trade data makes them a good bellwether for the …
Social distancing and the imposition of new restrictions in response to a surge in infections are weighing on economic activity across the region. But with manufacturing and construction sites remaining open, and online spending offsetting at least some …
20th May 2021
The first major outbreak of COVID-19 in Taiwan has triggered the first significant restrictions on activity. Consumer spending will suffer, but the rest of the economy should still perform strongly. Having made it through most of the last year without a …
17th May 2021
Thailand set to go from bad to worse Thailand’s GDP inched up in Q1, despite a renewed outbreak of the virus. But output is unlikely to hold up this quarter. We expect the economy to shrink sharply as a further surge in new COVID-19 cases pushes the …
Singapore circuit breaker 2.0 Singapore has announced several tough new measures to contain a sudden jump in COVID-19 infections. The restrictions will cause economic activity to drop in the near term, but the falls should be relatively small and GDP …
14th May 2021
The central bank in the Philippines (BSP) left its main policy rate on hold at 2.00% today, and while a temporary rise in inflation means interest rates are set to remain unchanged for the next few months, the dire economic outlook means the central bank …
12th May 2021
GDP rebounds, consumption set to remain a drag Malaysia’s economy saw an export-driven rebound of 2.7% q/q in Q1, despite a partial lockdown midway through the quarter. But a resurgence in virus cases and the recent reimposition of containment measures …
11th May 2021
GDP to contract in Q2 after recovery stalls in Q1 The Philippines economy barely improved in Q1 and the reimposition of strict containment measures is likely to see output shrink this quarter. Data released today show that the contraction in GDP eased …
Trouble in Thailand The outlook for Thailand’s economy has gone from bad to worse, with a sudden jump in COVID-19 cases leading to the introduction of new virus restrictions . The high-frequency mobility data that we track from Google and Apple point to a …
7th May 2021
The fact that Bank Negara Malaysia (BNM) left its policy rate on hold at 1.75% today despite the worsening economic outlook means any further loosening is unlikely. But with the recovery set to be slow and fitful, we think BNM will leave interest rates at …
6th May 2021
The Bank of Thailand (BoT) left interest rates on hold at 0.5% today and sounded very downbeat on the prospects for the recovery. The poor outlook for the economy means rates are likely to remain unchanged well beyond the end of the year. The decision …
5th May 2021
Indonesia’s economy struggled to gain any momentum in the first quarter of the year and a failure to contain the virus will hold back the recovery in the quarters ahead. Today’s figures show the economy contracted by 0.7% y/y in Q1, which was close to …
Buoyant export growth to continue Korean export values were well above pre-pandemic levels in April, and with semiconductor demand set to remain elevated, at least in the short term, exports are likely to stay strong. The timely nature of the Korean trade …
3rd May 2021
Industry going from strength to strength The April PMI readings suggest that manufacturing improved further in most places in Asia after a strong Q1. Global demand for electronics should continue to support the sector over the next few months. PMIs for …
Private consumption is Korea’s weak spot Korea’s Q1 GDP data showed that while output surpassed its pre-pandemic level last quarter, private consumption remained depressed. Consumer spending was still almost 6% lower than in the final quarter of 2019, …
30th April 2021
Taiwan has been the star performer of the pandemic, with figures today showing the economy grew by 8.2% y/y in the first quarter of the year. Surging demand for semiconductors and booming investment mean growth should remain strong over the coming …
