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The high-frequency data that we track suggest that while economic activity is picking up across most of the region, the pace of recovery varies significantly by country. We expect China, Singapore, Vietnam and Taiwan to bounce back quickest from the …
8th June 2020
Dreadful economic data from the Philippines Labour market and industrial production data released today for the Philippines confirm that output collapsed in April. With the lockdown being eased only gradually, the recovery in the Philippines is lagging …
5th June 2020
A sharp slowdown in Vietnam this year is unavoidable, but with the virus contained and with exports holding up better than might have been expected, we are raising our 2020 GDP growth forecast. Vietnam is likely to be one of the few economies anywhere in …
2nd June 2020
Further fall in exports probably marks the bottom Korean export values sank further in May after collapsing in April, and while this is likely to mark the bottom, external demand is only likely to recover very slowly in the coming months. Korean trade …
1st June 2020
Recovery in industry set to be slow We suspect that PMI readings do not accurately reflect the change in industry conditions last month, but they are still indicative of the fact that output remains very depressed. PMIs for May were released today for six …
Given the collapse in the global economy, merchandise exports from Emerging Asia have so far held up better than might have been anticipated. The fact that the global slump has been driven by services rather than manufacturing and the strength of demand …
29th May 2020
Bumps in the recovery More and more countries across the region have been relaxing lockdowns over recent weeks, and a recovery in economic activity now seems to be underway. However, with restrictions being relaxed, new cases have started to flare up. …
With new infections falling sharply across the region and with lockdowns being eased, economic activity is starting to recover. However, the latest high-frequency data that we track, including routing requests from Apple and mobility data from Google, …
28th May 2020
The Bank of Korea (BoK) cut its policy rate by 25bps to a new record low of 0.50% and gave some vague assurances that it would act to keep long term government bond yields down. With growth likely to disappoint and conventional policy reaching its limit, …
The impact of the crisis so far has been overwhelmingly disinflationary, and with demand likely to be depressed for a long time to come, inflation is set to remain very weak. A period of entrenched deflation is a growing concern in some countries, most …
27th May 2020
A surge in pharmaceutical production has provided a significant boost to Singapore’s economy over the past couple of months, but this is likely to prove temporary and will not prevent a massive contraction in the economy this year. April data show that …
26th May 2020
Pharma won’t save economy in Q2 A very strong performance from the biomedical manufacturing sector meant that Singapore’s economy contracted much less in Q1 than previously thought. But with a stringent lockdown in place at home and demand cratering …
Bank of Korea to get unconventional The Bank of Korea is likely to cut its policy rate to a record low of 0.5% and step up non-conventional support at its meeting on Thursday. At its last meeting in early April, the Bank held rates steady. (See here .) …
22nd May 2020
Indonesia is making much slower progress than others in the region in containing the spread of the coronavirus. This will hold back the economic recovery. We are cutting our GDP growth forecast for this year from -1% to -5%. Many countries in Asia appear …
21st May 2020
With policy rates close to the zero bound in Korea, Taiwan and Thailand, we think it is only a matter of time before central banks in these economies implement full-blown quantitative easing (QE) programmes. Malaysia may not be far behind either. But …
No signs of improvement Korean trade data for the first 20 days of May show no signs of a turnaround in exports despite the easing of lockdowns in many trading partners. The timely nature of the Korean trade data makes them a good bellwether for the …
With the economy in a massive slump and prices falling sharply, today’s decision by the Bank of Thailand (BoT) to cut interest rates by a further 25bp to a new all-time low of 0.50% came as no surprise. With the policy rate now not much above zero, the …
20th May 2020
Bank Indonesia’s (BI) decision to leave interest rates unchanged today at 4.5% is a big surprise given the slump in economic activity and the rebound in the rupiah. We think it will cut interest rates again soon. Having cut interest rates by 25bp in both …
19th May 2020
Most economies in Emerging Asia will experience falls in GDP of 10-20% in the first half of the year, which is similar to what we expect in most other parts of the world. However, with many in the region appearing to be containing the virus and with …
18th May 2020
Massive slump in Q2, slower recovery than elsewhere thereafter Figures released today show the slump in Thailand’s economy was less severe than expected last quarter, but this will provide little comfort, Q2 data are set be much worse. Thailand’s economy …
In response to the rapidly worsening outlook for the economy, Pakistan’s central bank (SBP) today slashed its key policy rate by a further 100bp to 8.0%. With the economy in freefall and the authorities struggling to contain the spread of the virus, more …
15th May 2020
Tourism slump in Thailand The first quarter GDP figures for Thailand (due on Monday) will make for grim reading. While all economies have been hit hard by coronavirus containment measures, the global tourism industry has suffered disproportionately. …
Reopening will not prevent massive slump in Q2 Malaysia Q1 GDP figures were slightly better than expected but will provide little comfort, with the economy set to contract much more sharply this quarter as depressed domestic demand and an extremely weak …
13th May 2020
Vietnam’s central bank (SBV) today cut its main policy rate by 50bp to 4.5%, and further rate cuts are likely given the poor economic outlook. Although life in the country appears to be slowly returning to normal after the lockdown came to an end late …
12th May 2020
With its lockdown being extended again today, the Philippines faces at least two more weeks before the economic recovery will begin. We think GDP will contract by 6% this year, which would make it one of the hardest-hit countries in the region from the …
Except for India’s, banking sectors across Emerging Asia went into the crisis in good shape. The economic recession now underway will cause a sharp rise in non-performing loans (NPLs), but most banks are well-placed to absorb the losses. This reduces the …
11th May 2020
Trade data show no sign of a turnaround Korean trade data for the first ten days of May show that exporters have taken a massive hit from lockdowns across the world. This bodes poorly for exporters across the rest of the region too. The timely nature of …
Encouraging signs as infections slow The low level of testing in some parts of the region means we shouldn’t read too much into the latest daily infection figures, but there are nevertheless some encouraging signs that more countries have succeeded in …
8th May 2020
GDP contracts in Q1, much worse to come in Q2 The larger-than-expected contraction in the Philippines economy in Q1 suggests that the lockdown there is having a severe impact on economic activity and that growth is likely to be even worse than we feared …
7th May 2020
Bank Negara Malaysia (BNM) today cut its policy rate from 2.50% to 2.00%, and with the outlook for growth very poor, we think the central bank will ease policy again in the coming months. Of the 20 analysts polled by Bloomberg, 14, including ourselves, …
5th May 2020
Economy to contract in Q2 GDP growth in Indonesia held up better than most in Q1, but we doubt this resilience will last. Indonesia was later than other countries to lockdown its economy, meaning more of the hit will have fallen in the second quarter. We …
Government debt will increase sharply across the region this year. For most countries this will not be a problem. The situation is most worrying in Pakistan and Sri Lanka where debt relief will be needed to put finances on a sustainable footing. Most …
4th May 2020
Malaysia reopened most of its economy today following nearly seven weeks of lockdown, but with consumer behaviour unlikely to return to normal quickly and global demand very weak, the economy is still set to contract sharply this year. The decision to end …
Industry conditions unlikely to improve much soon The manufacturing PMIs for Asia sank sharply in April and are unlikely to have bottomed out yet in many places. Any recovery in industry thereafter is set to be very slow going. PMIs for April were …
Slumping external demand taking its toll Korean export values fell sharply in April and with global demand collapsing, trade is likely to remain very weak. Indeed, we wouldn’t be surprised if the May data worsened further still. Korean trade data provide …
1st May 2020
Philippines: how bad will it get? Next Thursday’s Q1 GDP figures for the Philippines are likely to show that the economy grew at its slowest rate in over 10 years last quarter. But worse is still to come. The initial economic hit from the coronavirus was …
30th April 2020
GDP contracts in Q1, much worse to come in Q2 Taiwan’s economy contracted by 1.5% q/q in the first quarter of the year, and things are likely to get much worse before they get better. Despite containing the virus at home, a slump in global growth will …
We remain deeply concerned about the rapidly rising number of cases of coronavirus across South Asia as well as Indonesia. A failure to contain the virus would have significant economic consequences for these places. (See here .) More encouragingly, there …
27th April 2020
Singapore lockdown extended, growth forecast cut The decision by Singapore’s government to extend and toughen its lockdown will further reduce economic output this year. We are cutting our GDP forecast again. The lockdown was due to come to an end on 4 th …
24th April 2020
Vietnam has started to lift some of the shutdown measures that were introduced to slow the spread of the coronavirus, but this won’t prevent the export-dependent economy from slowing sharply this year. The decision to relax some restrictions on the …
Most countries in Emerging Asia are net importers of oil, so would usually stand to gain from a big drop in prices. But that benefit won’t materialise until consumer spending recovers. For Malaysia, which is the region’s only major net oil exporter, the …
23rd April 2020
Economy slumps, worse to come Economic activity in Korea fell by the most since 2008 last quarter and unfortunately there is much worse to come. With the external environment weighing heavily on export demand, a much deeper contraction is likely this …
Taiwan’s success at containing the coronavirus outbreak at home will not prevent the economy from falling into a huge recession this year. We think the economy will shrink by 5% this year, which would be by far the biggest contraction on record. Taiwan …
22nd April 2020
The impracticality of social distancing for many will make it hard for countries in South Asia to contain the coronavirus. Failure to contain the disease would have dreadful humanitarian consequences and would also lead to much slower economic recoveries …
Trade data beginning to reflect gloomy outlook Korean trade data for the first 20 days of April suggest that slumping external demand is now weighing heavily on Korean exports. The timely nature of the Korean trade data makes them a good bellwether for …
21st April 2020
Output should start rising again in most countries in Asia in the third quarter of the year as lockdown measures are eased. But economic recoveries will soon run into constraints resulting from subdued demand and impaired balance sheets. A full recovery …
20th April 2020
Over the Moon in Korea With all the votes from Korea’s parliamentary election now counted, it has been confirmed that President Moon’s Democratic Party (DP) and its affiliate party won 180 of the 300 seats in the National Assembly Seats. That gives the DP …
17th April 2020
The central bank in the Philippines (BSP) today cut its policy rate by 50bp at an emergence meeting, and with economic activity in the country collapsing, we doubt this will be the last move from the Bank. Today’s decision came unannounced, but it was no …
16th April 2020
The scale of job losses and falls in incomes caused by coronavirus containment measures across the world – but particularly in the US and the Gulf – is likely to weigh heavily on remittance inflows into Asia. A drop in remittances would increase the risk …
Adept handling of the current crisis has helped President Moon’s party to emerge from today’s National Assembly election with a majority, which should help breathe new life into his reform agenda. While the near-term economic outlook will depend on how …
15th April 2020
