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The central bank in the Philippines (BSP) cut its key policy rate today for the first time since June, and the weakness of the recovery means further easing is likely. Today’s 25bp cut takes the policy rate to just 2.0% - a fresh all-time low. The BSP has …
19th November 2020
The Bank of Thailand’s (BoT) decision to leave interest rates unchanged at an all-time low of just 0.5% came as no surprise. Given the poor outlook for the economy, rates are likely to remain very low for a long time to come. The recent strength of the …
18th November 2020
External sector remains in doldrums, tourism dependence to delay recovery GDP figures published today show that the worst is now over for Thailand’s economy, but its dependence on tourism means it is likely to experience one of the slowest recoveries in …
16th November 2020
Strong recovery to continue next year Malaysia’s economy rebounded strongly in Q3 and while a second wave of infections will weigh on growth in Q4, we don’t think it will be long before the recovery is back on track. Malaysia’s economy rebounded by 18.2% …
13th November 2020
Talks to establish the world’s biggest free-trade agreement, the Regional Comprehensive Economic Partnership (RCEP), are finally expected to conclude at the weekend. While a deal would provide a boost to sentiment, the direct economic benefits would be …
12th November 2020
BSP under pressure to cut The weakness of the recovery in the Philippines means that the central bank (BSP) is likely to lower interest rates at next Thursday’s scheduled meeting. Third quarter GDP figures published earlier this week confirm that the …
Korean export recovery to remain strong Korean exports remained buoyant in the first ten days of November and there are few signs that large second waves of the virus are weighing on demand for Korean exports. We expect continued strong export growth in …
11th November 2020
Asia may have less to gain than other parts of the world from a coronavirus vaccine, given successes in containing the new coronavirus. A widely-distributed and effective vaccine would nonetheless give a huge boost to tourist industries and it would …
10th November 2020
Weak recovery to lose momentum The Philippines saw a lacklustre rebound in GDP in Q3 and improvements are likely to be harder to come by in the quarters ahead. Output is unlikely to regain its pre-crisis level until late next year. The contraction in GDP …
Joe Biden is likely to take a different approach to trade relations than Donald Trump, but his election will not reinvigorate globalisation, which has stalled over recent years. This will act as a headwind for the region’s poorer economies. Joe Biden …
9th November 2020
Malaysia 2021 Budget Malaysia’s 2021 budget, which was tabled before parliament today, reveals that the government is planning to keep fiscal policy much looser than we had originally expected. Government spending is projected to increase by a further …
6th November 2020
Signs of recovery, but a long road ahead The y/y contraction in Indonesian GDP eased in Q3, and the economy is likely to experience a slow recovery over the coming quarters. Indonesian GDP contracted by 3.5% y/y last quarter. (See Chart 1.) This is an …
5th November 2020
Bank Negara Malaysia (BNM) left its main policy rate on hold at 1.75% today, but with a new set of restrictions to combat a second outbreak of the virus dragging on the economy, we doubt this marks the end of the central bank’s easing cycle. Of the 21 …
3rd November 2020
Industry to maintain momentum PMI readings for Asia suggest that manufacturing conditions improved further in October, and strong global demand for electronics should continue to support the sector over the coming months. PMIs for October were released …
2nd November 2020
Korean exports likely to be resilient in months ahead Korean export values picked up to above pre-crisis levels in October and grew in working-day adjusted y/y terms for the first time since late-2018. While large second waves of the virus across the …
Recent data add weight to upbeat forecasts Activity data released today suggest that Korea’s economy ended last quarter on a strong note and that the provisional estimate of Q3 GDP is likely to be revised up. The first estimate of Q3 GDP – which is …
30th October 2020
Economy continues to outperform, raising our GDP forecast Taiwan’s economy continued to outperform much of the rest of the world in the third quarter, with GDP rising by 3.3% y/y. With the virus eliminated at home and exports rebounding strongly, the …
Asian exports have continued to defy gravity. Despite the biggest slump in the global economy since the Second World War, regional exports are already back to their pre-crisis level. The resilience of exports in much of Asia has helped offset some of the …
28th October 2020
The progress made towards the development of a vaccine against COVID-19 has been remarkable. Most experts now believe that a vaccine may be available by the end of this year or the first quarter of 2021. Although Asia has contained the coronavirus better …
27th October 2020
Korean GDP rebounded last quarter as exports bounced back strongly, and with the economic impact of the “second wave” fading and exports picking up further, the recovery is set to continue over the coming quarters. Data released today show GDP rose 1.9% …
Economies rebounding, but output remains weak National accounts data due to be published over the next few weeks will show that many economies experienced record-breaking rebounds in GDP in the third quarter as they reopened from strict lockdowns. (See …
23rd October 2020
The Central Bank of Sri Lanka (CBSL) left both its deposit and lending rate on hold at 4.50% and 5.50% respectively at its meeting today but, given the poor outlook for the economy, we think the easing cycle has further to run. The decision was correctly …
22nd October 2020
With the US election result unlikely to have immediate ramifications for US GDP, the main issue for much of Asia is how it affects trade policy. A Joe Biden presidency would be less confrontational towards Asian economies outside China. By contrast, a …
21st October 2020
Electronics-driven export rebound picking up speed Strong export growth in the first 20 days of October was driven by buoyant foreign demand for electronics, and exports now look likely to provide a boost to y/y growth this quarter. Timely Korean trade …
Political wrangling compounding COVID risks Malaysia’s economy has rebounded rapidly from the crisis. Second quarter national accounts data show that by the end of June the economy was just 3.2% smaller than it was a year ago. (See here .) Recent upbeat …
16th October 2020
The renewed risk of domestic political unrest in Thailand following the declaration of a “severe” state of emergency could act as a further drag on the already beleaguered economy. In response to student-led protests calling for Prime Minister Prayuth …
15th October 2020
The COVID-19 crisis has led to a ballooning of current account surpluses across Emerging Asia that is putting upward pressure on currencies. The shift to bigger external surpluses could also land the region in hot water with the US Treasury as it prepares …
14th October 2020
The Bank of Korea (BoK) left its main policy rate on hold at 0.50% today and, with the economic recovery holding up relatively well, further rate cuts seem unlikely. Instead the focus of the BoK is likely to shift to cushioning the impact of loose fiscal …
Economy recovering, monetary policy set to stay loose for an extended period The Monetary Authority of Singapore (MAS) left policy on hold today as advanced GDP data showed that the economy rebounded well in Q3. However, with GDP still well below its …
Bank Indonesia (BI) left interest rates on hold at 4.0% today, but it is too soon to call an end to the easing cycle. With the economy in need of further support, we think the central bank will resume its easing before the end of the year. BI left …
13th October 2020
Surge in Vietnam’s exports puts it in danger Vietnam has so far emerged as the biggest winner of the US-China trade war, as tariffs on goods from China have led US importers to switch suppliers. Vietnam’s exports to the US have doubled since the start of …
9th October 2020
Overview With the virus under control in most of the region, Emerging Asia is bouncing back from the crisis faster than other parts of the world. But the pace of recovery is uneven. China is leading the way. In the countries hit worst economically, the …
8th October 2020
The near-term outlook for Indonesia’s economy is dreadful. A failure to contain the virus means the country will experience one of the slowest recoveries in the region. But a series of landmark reforms passed by parliament yesterday could set the stage …
6th October 2020
Industry to maintain momentum PMI readings for Korea and Taiwan suggest industry in both countries picked up momentum last month, and we expect output to continue growing in the months ahead on the back of strong exports. PMIs for September were released …
5th October 2020
Fiscal policy to remain supportive in Indonesia Indonesia has signalled that fiscal policy will remain supportive of the economic recovery after it unveiled a budget for next year that envisages only a very small fall in the budget deficit. Earlier this …
2nd October 2020
The central bank in the Philippines (BSP) left its main policy rate on hold at 2.25% today for a second consecutive meeting, but with the economic recovery proving to be one of the slowest in the region, we doubt the Bank has finished easing yet. The …
1st October 2020
Export recovery to gradually continue Korean export values held steady in September at a touch below pre-crisis levels, and we expect gradual improvements in the months ahead. Korean trade data provide a good guide to the performance of exporters …
Korea looks to have contained its “second wave” of the virus with minimum cost to the economy. There were just 38 newly confirmed cases in Korea today, which was the lowest since early August and down from a peak of 441. With cases falling, the government …
29th September 2020
Regional outperformer Vietnam’s economy rebounded in the third quarter and should continue to perform strongly over the coming year. A surge in exports to the US, aggressive rate cuts by the central bank and the government’s success in containing the …
Lacklustre fiscal support in the Philippines Inadequate fiscal support is holding back growth in the Philippines and, unless this improves, the recovery will continue to underwhelm. August data show that fiscal spending remained subdued. It grew by just …
25th September 2020
Continued trade tensions between the US and China are providing a significant boost to economic prospects in Taiwan and Vietnam. Having also successfully contained the virus without significant economic damage, Taiwan and Vietnam are likely to be the only …
Asian central banks have taken their foot off the gas in recent months – no central bank in the region has cut rates since July. But we think this represents a pause rather than an end to the easing cycle. With GDP still well below pre-crisis levels in …
24th September 2020
The Bank of Thailand’s (BoT) decision to leave interest rates unchanged at 0.5% came as no surprise, and rates look set to remain unchanged for some time to come. The central bank hinted at further measures to support demand, but the onus will be on the …
23rd September 2020
Success in bringing the COVID-19 outbreak under control in Pakistan, Sri Lanka and to a lesser extent Bangladesh has enabled activity in these places to rebound much faster than in India, where new infections continue to surge. This supports our view that …
22nd September 2020
Pakistan’s central bank (SBP) left interest rate unchanged today at 7.0% and appeared to signal the end of its recent easing cycle. With the economy recovering well from the coronavirus crisis and inflation concerns increasing, we expect rates to remain …
21st September 2020
Recovery in external sector picks up pace Exports rebounded to pre-crisis levels for the first time in the first 20 days of September and, while we don’t necessarily think export values will keep going from strength to strength, today’s data add weight to …
Peso to hold up in months ahead The Philippine peso has been the best performing currency in Emerging Asia so far this year (see Chart 1.) and is now at its highest level against the US dollar since late 2016. We expect the peso to strengthen further over …
18th September 2020
Bank Indonesia’s (BI) decision to leave interest rates unchanged today at 4.0% shows that it is prioritising financial stability over supporting the economy. Further easing is possible later in the year if the currency stabilises, but the pace of rate …
17th September 2020
With the economy holding up relatively well, the decision by Taiwan’s central bank (CBC) to leave interest rates on hold came as no surprise. Further rate cuts are unlikely, and we expect interest rates to remain on hold for the foreseeable future. The …
Second wave fears ease The recent jump in coronavirus cases in Korea, Hong Kong and Vietnam had a negative impact on each economy, with hospitality sectors bearing the brunt of the damage. But with infection numbers now falling again and restrictions …
11th September 2020
