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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 …
19th November 2021
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 …
Some improvements, but Delta disruption still evident While regional PMIs showed that the disruption from large virus waves in the region is easing somewhat, unmet orders continue to pile up, meaning that the resulting shortages further down supply chains …
Over the past month or so, the central banks of Korea, Pakistan and Sri Lanka have all raised interest rates, but we don’t think other countries will be in any rush to follow suit. There is certainly little to worry about on the inflation front. …
29th September 2021
The Bank of Thailand (BoT) left interest rates on hold today at 0.5%, and we have taken out the rate cut we originally had pencilled in for this year. However, rate hikes are still a long way off. Unlike the central bank’s August meeting when two of the …
Huge hit to growth, but the worst is now over GDP data reveal that Vietnam paid a heavy economic price in efforts to control the virus this quarter, but monthly activity data at least suggest that the worst is over and that a recovery is now underway. The …
Weak recovery suggests further easing is likely Pakistan’s decision to raise interest rates earlier this week came as a surprise to many ( although not to us ), and we think another surprise could be in store at the Bank of Thailand’s scheduled meeting on …
24th September 2021
Taiwan export orders dipped back again in August, suggesting that demand for Asian electronics goods may have peaked. However, with demand still running well ahead of supply, shortages are likely to remain a constraint on global manufacturing for some …
Taiwan’s central bank (CBC) today left interest rates unchanged at 1.125%, and we think policymakers will be in little rush to start tightening policy despite the strong economy. Today’s decision was unanimous and was correctly predicted by all 25 …
23rd September 2021
The fact that the central bank in the Philippines (BSP) left its main policy rate on hold at 2.00% today, despite the very weak state of the economy, suggests further easing is unlikely. While we are now taking out the cuts we had pencilled into our …
Few signs of exports softening Korean export values are set to have another strong month in September. Large backlogs of orders are likely to keep exporters busy for many months to come. The timely nature of the Korean trade data makes them a good …
Countries across Emerging Asia are making renewed efforts to reopen their borders to boost flagging tourism sectors. However, ongoing travel restrictions and the spread of the more infectious Delta variant mean that tourism will continue to struggle. This …
22nd September 2021
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 on the back of a fall in virus cases but the rupiah holding up well, we think …
21st September 2021
The State Bank of Pakistan (SBP) today raised interest rates by 25bp and made clear further tightening is likely as the central bank shifts its focus away from supporting the recovery and towards boosting the currency. We expect more rate hikes over the …
20th September 2021
Indonesia and Taiwan on hold There are four major monetary policy meetings scheduled in the region next week. While we expect the central banks of Indonesia and Taiwan to leave rates unchanged, we are pencilling in a hike by the State Bank of Pakistan …
17th September 2021
Falling foreign exchange reserves, a declining currency and a high level of foreign currency debt mean the risk of a sovereign default in Sri Lanka is growing. While the country should be able to muddle through for the next few months, it faces a crunch …
16th September 2021
Virus outbreaks starting to ease Virus outbreaks across South East Asia are in retreat. The biggest improvement has been in Indonesia, where daily cases of COVID-19 are now just over 10% of the level they reached in July. Numbers are also coming down in …
10th September 2021
Malaysia’s central bank (BNM) left interest rates unchanged at 1.75%, and won’t be in any rush to adjust rates soon. Although the economy should start to rebound now that virus restrictions are being eased, output is likely to remain below potential for …
9th September 2021
Singapore’s decision to reimpose some restrictions despite the country’s rapid vaccine rollout raises questions about its long-term strategy of living with COVID-19. The government’s caution will hold back the recovery in the near term, and its recent …
8th September 2021
While the spike in August inflation in the Philippines makes the central bank’s (BSP) policy decision this month an even closer call, the worsening outlook for the economy means we are sticking with our non-consensus view of a 25bp cut on 23 rd September. …
7th September 2021
