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The Central Bank of Sri Lanka (CBSL) left both its deposit and lending rates on hold at 4.50% and 5.50% respectively at its meeting today, but given the poor outlook for the economy and mounting political pressure, we think the easing cycle has further to …
20th August 2020
Bank Indonesia’s (BI) decision to leave interest rates unchanged at 4.0% suggests that it is waiting to see if the recent stabilisation in the rupiah holds. Provided it does, we think further easing is likely over the coming months as the economic …
19th August 2020
Massive slump in Q2, tourism to hold up recovery The drop in Thai GDP last quarter was not as huge as some other economies in the region, but Thailand’s dependence on tourism will weigh on the recovery in the quarters ahead and means the economic outlook …
17th August 2020
Rapid rebound in Malaysia The collapse in Malaysian GDP in the second quarter that was reported earlier today generated all the headlines, but what was more revealing about the GDP release is how quickly the economy is bouncing back. The economy …
14th August 2020
Malaysian economy rebounding strongly after massive slump in Q2 Malaysia’s economy contracted by much more than we had expected in Q2, but monthly GDP data suggest that most of the slump had unwound by the end of the quarter. We think the economy will …
The high-frequency data that we track suggest that the recovery is most advanced in China and Taiwan, with India, Indonesia and the Philippines bring up the rear. Recent virus outbreaks in Hong Kong and Vietnam have put their recoveries into reverse. In …
12th August 2020
Possible signs that recovery in external demand is faltering The unexpected slump in Korean exports in the first 10 days of August could just be volatility in the data, but a reversal in the performance of exports to the US suggests the fall at least …
11th August 2020
Rebound already well underway after historic slump Revised GDP figures confirm that Singapore’s economy collapsed in Q2, but the message from the more-timely data is that a strong recovery is already underway. We expect this rebound to continue, …
Singapore bouncing back The second and final estimate of second quarter GDP for Singapore, due to be published on Tuesday, will confirm that the economy suffered a historic slump last quarter. A strict lockdown, a fall in exports and a collapse in visitor …
7th August 2020
The landslide victory by Sri Lanka People’s Party (SLPP) will allow incumbent President Rajapaksa to consolidate power. This is likely to lead to an increase in corruption and nepotism and will also add impetus to Mr Rajapaksa’s plans to “restore …
Slow and fitful recovery to follow unprecedented slump The Philippines experienced what is likely to be one of the biggest falls in output anywhere in Q2. A failure to contain the virus, continued restrictions to movement and inadequate policy support …
6th August 2020
The Bank of Thailand’s (BoT) decision to leave interest rates unchanged at 0.5% despite the very poor outlook for the economy suggests further rate cuts are unlikely. In its statement, the BoT hinted at further measures it could take to support growth, …
5th August 2020
A slow recovery after historic drop in GDP Economic activity in Indonesia collapsed in the second quarter. A failure to contain the virus effectively and inadequate policy support mean the recovery is likely to be one of the slowest in the region. Figures …
More signs of recovery in July PMIs for Emerging Asia and Korean trade data suggest that the recovery in economic activity across the region is picking up some momentum. That said, the data do not point to the kind of strong rebound observed in China, and …
3rd August 2020
Economy outperforms, raising our 2020 growth forecast The 0.7% y/y drop in GDP last quarter was Taiwan’s worst performance since the Global Financial Crisis, but it still represents an unusually strong performance given what’s happening in the rest of the …
31st July 2020
New outbreak in Vietnam After going 100 days without a single case of community transmission, over 40 new coronavirus infections have been reported in Vietnam over the past week. The jump puts the country’s economic recovery at risk. The outbreak is …
30th July 2020
The second quarter GDP figures for the region that have already been published make for grim reading, but there is a big divergence between countries. In aggregate terms we estimate that Emerging Asia (excluding China) contracted by around 10% y/y last …
28th July 2020
Time to worry about the rupiah? The Indonesian rupiah has been by far the most volatile currency in the region since the start of the year. It slumped by nearly 20% against the US dollar at the start of the crisis, before bouncing back strongly. However, …
24th July 2020
China’s rapid economic recovery from the Global Financial Crisis did not play as big a role as is commonly assumed in supporting growth in the rest of Asia. We doubt a strong rebound in China from the current crisis will provide much support to demand in …
Korean GDP shrank sharply in Q2 on the back of the largest drop in exports since 1963, but output probably bottomed out in the middle of the quarter. The recovery, which is already underway, is set to be slow going as the external environment only …
23rd July 2020
More signs of recovery Korean trade data for the first 20 days of July suggest that the recovery in exports has continued this month. But the initial rebound has still been weak and the recovery in external demand in the quarters ahead is also likely to …
21st July 2020
What will the Q2 GDP figures show in Korea? Korea avoided the need for a full lockdown and the GDP figures due on Thursday should show that economic activity held up relatively well last quarter as a result. We have pencilled in a contraction of “only” …
17th July 2020
Bank Indonesia’s (BI) decision to cut interest rates today suggests that for now at least it is prioritising the economy over supporting the rupiah. We think further rate cuts are likely over the coming months, but the pace of easing is set to be gradual. …
16th July 2020
The Bank of Korea (BoK) left its policy rate on hold at 0.50% today and while it did not unveil any further unconventional policy measures, the Bank gave hints it could employ them in future. With growth likely to disappoint, we still expect a more …
Overview Economic activity is rebounding across the region, but the speed of the recovery varies significantly by country. Daily life in China, Vietnam and Taiwan has already returned largely to normal, thanks to their early success in containing the …
15th July 2020
Sharp contraction, fiscal spending to support recovery Singapore’s economy contracted by the most on record in Q2, but with many restrictions to economic activity now lifted and strong government support, output is set to rebound over the second half of …
14th July 2020
Tentative signs of further recovery Korean trade data for the first ten days of this month suggest that the recovery in external demand gained a little momentum at the start of July. This should carry on over the coming months, albeit slowly. The timely …
13th July 2020
Supporting the economy through the crisis The main priority for Singapore’s ruling People’s Action Party (PAP), which is certain to win tomorrow’s general election, is ensuring a strong recovery from the crisis. There are good reasons to expect a rapid …
9th July 2020
The Central Bank of Sri Lanka (CBSL) cut both its deposit and lending rates by 100bps to 4.50% and 5.50% respectively at its meeting today, and given the poor outlook for the economy, we think the easing cycle has further to run. The decision was …
Bank Negara Malaysia (BNM) cut its main policy rate by 25bps to 1.75% today, and with the economic recovery still in its infancy, we doubt this marks the end of the central bank’s easing cycle. The decision to cut was no surprise, 18 of the 25 analysts …
7th July 2020
Thailand – tourism not the only worry Despite having successfully contained the virus, which has allowed daily life in Thailand to return to normal quicker than in many places, the country is still set to be one of the worst-hit in the region this year, …
3rd July 2020
Exports bottom out, slow recovery ahead Korean export values nudged up very slightly in June, after collapsing in April and May, but while external demand is probably now past the worst, it is only likely to recover slowly in the coming months. Korean …
1st July 2020
Manufacturing sector rebounding, but slow recovery ahead The PMIs point to an improvement in manufacturing conditions last month, although many readings are still low and suggest that overall manufacturers continue to struggle. PMIs for June were released …
A slump in Korea’s automotive sector, which accounts for around 10% of GDP, is weighing heavily on the country’s prospects. The latest industrial production data which were published today show that motor vehicle output fell by 35% y/y in May, compared …
30th June 2020
It is by no means inevitable that the coronavirus crisis puts a big permanent hole in the supply capacity of economies (i.e. their ability to produce goods and services). With the right government policies, many economies should be able more or less to …
29th June 2020
Economy to outperform after strong Q2 performance Vietnam’s economy slowed sharply in the second quarter, but the numbers were stronger than expected, and put the economy on course to be one of the few countries in the world to grow this year. The fact …
Taiwan continuing to perform well Data published over the past week provide further evidence that Taiwan’s economy is continuing to hold up extremely well. Industrial production grew 1.5% y/y in May, and while this was down from 4.2% the month before, it …
26th June 2020
The central bank in the Philippines (BSP) today cut its policy rate by a larger-than-expected 50bps, to 2.25%, and with economic activity unlikely to recover fully anytime soon, we expect further easing. The timing of today’s decision was a surprise given …
25th June 2020
The Bank of Thailand’s (BoT) decision to leave interest rates unchanged at 0.5% today despite the dire outlook for the economy suggests that further cuts to the policy rate are unlikely. Instead, the emphasis over the coming months is likely to be on what …
24th June 2020
More signs of recovery Korean trade data for the first 20 days of June suggest that the slump in exports is probably past the worst. But the recovery in external demand in the quarters ahead is likely to be a protracted one. The timely nature of the …
22nd June 2020
Will exports continue to defy gravity? Given the collapse in global demand, the relative strength of Asian exports has come as something of a surprise. We estimate that Asian exports are down by around 15% y/y, which is much less than the 40-50% declines …
19th June 2020
Taiwan’s central bank (CBC) kept its policy rate on hold today at 1.125%, but given the poor outlook for the economy, we think it will cut again soon. Today’s decision to keep rates at 1.125% was unanimous. The decision was correctly predicted by 15 out …
18th June 2020
Bank Indonesia (BI) cut interest rates today for the first time in three months, but the modest 25bp cut suggests that it remains worried about the outlook for the rupiah. Given the bleak growth outlook we expect further gradual easing over the coming …
The high-frequency data that we track suggest that while all countries in the region are now rebounding, the pace of recovery varies significantly. The recovery is most advanced in China, Taiwan and Vietnam. The Philippines, Indonesia and India are doing …
17th June 2020
Pockets of export sector benefiting from pandemic demand The strength of the pharmaceutical and electronics sectors has helped Singaporean exports to outperform and is one reason why we are revising up our GDP growth forecast for 2020 from -8.0%, to …
Re-opening to foreign tourists Tourism across emerging Asia has been destroyed by the coronavirus pandemic. In Thailand, where spending by foreign tourists was the equivalent of around 10% of GDP before the crisis, all foreign visitors have been banned …
12th June 2020
Signs of a nascent recovery Korean trade data for the first ten days of June suggest that the external environment improved slightly at the start of this month. We suspect this will mark the start of a long and slow recovery. The timely nature of the …
11th June 2020
Despite the sharp rise in the unemployment rate last month, there are signs that the Korean labour market has turned a corner. This adds to evidence that the economy has now bottomed out. The unemployment rate shot up from 3.8% in April to 4.5% in May, …
10th June 2020
Lockdowns are being eased in India, Pakistan and Bangladesh without any sign that coronavirus infections are being brought under control. Economic recoveries will face greater headwinds than in places where the virus has been contained as a result. But …
9th June 2020
With domestic infections contained, the main way in which the global pandemic has threatened Taiwan economically is through weakness in external demand. Exports have held up much better than we had originally anticipated, and so we are raising our 2020 …
8th June 2020
