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In this Update we take a look at the important elections and political events that are set to take place across Asia over the coming year as well as any potential flashpoints, assessing the implications for policymaking and economic growth. Later this …
20th January 2021
Overview – Our forecasts for GDP growth across Emerging Asia in 2021 are much higher than consensus expectations across the board, but fresh outbreaks in a number of countries mean the risks to our forecasts are to the downside. Korea , Malaysia, Hong …
18th January 2021
Indonesia’s novel vaccine strategy Indonesia’s vaccination campaign got underway earlier this week amid surging cases of COVID-19 across the country. Whereas most countries are prioritising the elderly and vulnerable in vaccination rollouts, Indonesia has …
15th January 2021
The Bank of Korea (BoK) left its main policy rate on hold at 0.50% today in a unanimous decision, and with signs that the latest virus outbreak is coming under control, further rate cuts seem unlikely this year. Korea’s third wave of the virus had …
The decision by the Malaysian government to place the country under a two-week lockdown to slow the spread of the virus is likely to hit the economy hard. We are cutting our growth forecast for 2021 from 10% to 7%. We also now expect the central bank to …
12th January 2021
Korean exports to remain elevated Korean trade data suggest that strong export growth continued at the start of the year and reaffirm our view that exports will remain an important support to recoveries in Korea and across Asia. The timely nature of the …
11th January 2021
Vietnam: outperformance continues GDP figures for Vietnam should always be treated with caution, but data released before New Year show that the economy grew by an impressive 4.5% y/y in the final quarter of 2020. This brought growth for the year to 2.9%, …
8th January 2021
Korea’s population last year shrank for the first time in its history, underlining the seriousness of the demographic “time bomb” facing the country. The poor demographic outlook is the key reason why we expect trend growth in Korea to slow sharply over …
5th January 2021
Recovery to continue at decent pace in 2021 Advanced GDP data show that Singapore’s economy continued to rebound at the end of 2020 – buoyant global demand for electronics and pharmaceuticals, strong fiscal support, and widespread vaccination should see …
4th January 2021
Strong end to 2020 to continue into this year Manufacturing PMIs and Korean trade data suggest that regional industry and exports saw another sharp improvement at the end of the year. While some of this strength may fade in the coming quarters, we still …
The Bank of Thailand’s (BoT) decision to leave interest rates unchanged at an all-time low of just 0.5% today came as no surprise, and the poor outlook for the economy means rates are likely to remain at their current low level until at least the end of …
23rd December 2020
Korea , Hong Kong, Malaysia and Thailand are all experiencing major new outbreaks of the virus, which pose a significant downside risk to our relatively upbeat GDP forecasts for these countries for 2021. The lesson from Vietnam , which experienced a big …
22nd December 2020
Strong Korean export growth to continue Korean exports remain remarkably strong, despite renewed waves of the virus at home and abroad, and we expect this to continue over the coming months. The timely nature of the Korean trade data makes them a good …
21st December 2020
Fiscal policy to stay supportive, except in Sri Lanka Most countries in Asia came into this year with a relatively low level of government debt. They are generally better placed than other emerging markets to cope with the sharp increases due to COVID-19. …
18th December 2020
The decision by Taiwan’s central bank (CBC) to leave interest rates unchanged at 1.125% came as no surprise given the strong performance of the economy. We expect interest rates to be left unchanged over the coming year. Today’s decision was correctly …
17th December 2020
Indonesia’s central bank left interest rates unchanged today, but given the poor outlook for growth, further easing is likely early next year. The decision by Bank Indonesia to leave interest rates unchanged at 3.75% came as no real surprise – 24 of the …
The central bank in the Philippines (BSP) left its key policy rate on hold today at 2.0%, but the weakness of the recovery means further easing is likely. The pause was no surprise. All 16 analysts polled by Bloomberg had expected no change, including …
The US Treasury’s decision to label Vietnam a currency manipulator today is primarily a response to the surge in Vietnam’s trade surplus with the US. The next step is likely to be talks – with Vietnam likely to promise to increase imports from the US and …
16th December 2020
The Korean government is on the verge of introducing much tighter restrictions to stem the rise in coronavirus cases. We are not cutting our GDP growth forecasts yet, but the risks are now clearly to the downside. Daily new confirmed cases of coronavirus …
Our forecasts for GDP growth across emerging Asia in 2021 are much higher than consensus expectations across the board. Even so, in many places, output will still be below the pre-crisis level until the end of the year and it will remain well below its …
On hold on Thursday, and beyond Taiwan’s central bank (CBC) looks all but certain to leave its main policy rate unchanged at its current all-time low of 1.125% at its meeting on Thursday. With the economy performing well, there is a plausible argument …
11th December 2020
Korean export recovery to remain strong Korean exports were buoyant in the first ten days of December, with no sign that renewed waves of the virus are weighing on external demand. We expect exports to remain strong in the coming months. The timely nature …
Faster recovery now likely The recent good news on vaccine development means that countries in Emerging Asia are likely to start inoculating their populations sooner than we had previously envisaged. As we outlined in a recent Update , an effective …
4th December 2020
Korean export outperformance to continue Korean export growth continued to gather momentum in November and is set to remain strong in the months ahead, buoyed by foreign demand for electronics. Korean trade data provide a good guide to the performance of …
1st December 2020
Strong industry performance to continue PMI readings for Asia suggest that manufacturing conditions improved significantly in November. Buoyant global demand for electronics should continue to support the sector over the coming months. PMIs for November …
National accounts data published over the past month or so confirm that many economies experienced record-breaking rebounds in GDP in the third quarter. However, there are significant variations across the region. Output is now back to its pre-crisis …
30th November 2020
Despite renewed concern from policymakers in Thailand over the appreciation of the Thai baht, we find little evidence that the rising currency is having a negative effect on the economy, and we don’t think it will be a major drag on the recovery. At its …
How will the BoK respond to rising property prices Rising property prices in Korea appear to be causing some concern at the central bank, with the BoK governor on Thursday again noting that “housing prices have continued to increase in all parts of the …
27th November 2020
The Bank of Korea (BoK) left its main policy rate on hold at 0.50% in a unanimous decision, and with the economy set to rebound further in spite of a growing third wave of the coronavirus, further easing seems unlikely in the months ahead. Instead, rates …
26th November 2020
Exports maintain strong momentum Buoyant foreign demand for electronics drove strong export growth over the first 20 days of November and this should remain the case over the coming months. Timely Korean trade data are a good bellwether for the health of …
23rd November 2020
Economy bouncing back strongly The upward revision to Singapore’s Q3 GDP figures shows that the economy has rebounded strongly, and we expect the recovery to continue at a decent pace on the back of strong fiscal support and buoyant global demand for …
More encouraging vaccine news The past week has brought more positive developments on the vaccine front, with the latest news from AstraZeneca and Pfizer providing a further boost to regional stock markets. It now seems likely that at least one vaccine …
20th November 2020
Bank Indonesia (BI) cut its main policy rate today by 25bps to 3.75%, and further gradual easing is likely provided the currency continues to perform well against the US dollar. Of the 26 economists polled by Bloomberg, 14 expected rates to remain …
19th November 2020
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 …
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 …
