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Bank Indonesia (BI) today left interest rates unchanged at 5.0% but, with growth set to remain weak and the rupiah holding up well, we think further easing is likely in the new year. Having cut rates by a cumulative 100bp so far this year, the central …
19th December 2019
Growth in Emerging Asia has struggled over the past year. While most economies should stage a modest recovery over the coming quarters on the back of looser fiscal and monetary policy, with China likely to slow, aggregate growth in the region is set to …
The Bank of Thailand (BoT) left its policy rate unchanged today, but further rate cuts are likely next year. Having cut interest rates twice this year already (in August and November) today’s decision to leave rates unchanged at 1.25% came as no surprise, …
18th December 2019
Singapore’s economy appears to be benefitting from tourists and business travellers shunning Hong Kong. Since the Hong Kong protests intensified in July, tourist arrivals to Singapore have picked up. Meanwhile, hotel occupancy rates have jumped and were …
17th December 2019
Indonesia considers relaxing fiscal rule Adopting a more flexible fiscal target would give Indonesia’s government more room to support growth during periods of weak demand without threatening the country’s fiscal position. Under the current fiscal rule, …
13th December 2019
The Philippines (BSP) left its main policy rate at 4.00% today, but with growth likely to disappoint and inflation set to remain below the mid-point of the BSP’s target, we expect more easing next year. Today’s decision to leave the main policy rate on …
12th December 2019
The peso has rebounded over the past year due in large part to a sharp narrowing of the current account deficit. But with the deficit set to widen again next year as infrastructure spending picks up, the currency is likely to come under renewed downward …
9th December 2019
Trade war disruption US trade data released earlier this week for October reveal the extent to which the US-China trade war is disrupting regional supply chains. In the first 10 months of the year, US imports from China fell by 15% as tariffs caused US …
6th December 2019
Inflation in the Philippines rose last month for the first time since May and is set to climb higher over the coming year. However, with inflation set to remain low by past standards, we are sticking with our view that the central bank will loosen policy …
5th December 2019
Recently published figures showing a further fall in the fertility rate in Korea underline the seriousness of the demographic “time bomb” facing the country. The worsening demographic outlook is the key reason why we expect trend growth in Korea to slow …
2nd December 2019
Industry remains weak, but some signs of improvement PMIs for Emerging Asia (ex. China) were slightly more positive in November, suggesting that while industry remains weak it is starting to recover. The continued improvement in PMIs for China provides …
Export figures point to continued weakness in external demand Korean export growth in November was much weaker than expectations and suggests that external demand remains in the doldrums. Headline inflation was also weaker than expected last month. Korean …
VAT cut a risk to Sri Lanka’s fiscal health In his first major policy move since being elected Sri Lankan president earlier this month, Gotabaya Rajapaksa on Wednesday cut the rate of VAT from 15% to 8% (the cut will take effect on 1 st December). On the …
29th November 2019
The Bank of Korea (BoK) left rates on hold today but kept the door open to further easing. With growth set to stay subdued and inflation likely to remain weak, we have pencilled in one more 25bp rate cut for early 2020. Today’s decision to leave the main …
Looser monetary and fiscal policy should help to drive a modest recovery in Thailand over the coming quarters, and we are revising our GDP growth forecast for next year up slightly. Figures released earlier this month showed Thailand grew by just 2.4% y/y …
26th November 2019
A sharp rise in the US dollar assets of Taiwanese life insurance companies poses a major threat to the health of the country’s financial sector and could also have consequences for the stability of the global financial system. A key cause of previous …
25th November 2019
Latest data point to start of slow recovery Economic data published this week by Singapore and Korea, which are both good bellwethers for the rest of the region, add to evidence that the worst is now over for regional growth. The second estimate of …
22nd November 2019
GDP growth was either flat or picked up slightly in most parts of Emerging Asia last quarter, and we think regional growth will rise gradually over the coming year helped by a slow recovery in exports and looser fiscal and monetary policy. All of the …
Bank Indonesia (BI) today left interest rates unchanged, but the cut to the reserve requirement ratio (RRR) and dovish comments from Governor Perry Warjiyo suggest that further interest rate cuts are likely. The decision by Indonesia’s central bank to …
21st November 2019
Weak recovery ahead The revised estimate of Singapore GDP showed that the economy bounced back a little last quarter, but while we expect this recovery to continue in the quarters ahead, it is likely to be slow going. According to today’s revised …
A sharp fall in the rupee and a series of aggressive interest rate hikes has led to a welcome fall in Pakistan’s external imbalances. However, with growth slowing sharply and inflation close to multi-year highs, the country is not out of the woods yet. …
20th November 2019
Asian export growth should start to pick up over the coming months. However, the recovery will mainly reflect a more favourable base for comparison following the collapse in electronics exports at the end of last year, than an improvement in underlying …
19th November 2019
Weak growth to continue GDP growth in Thailand only managed to nudge up in Q3, and with global growth set to drag on exports we expect the economy to remain sluggish in the quarters ahead. Growth edged up to 2.4% y/y in Q3, from 2.3% in Q2. The outturn …
18th November 2019
Philippines: Will ill health force Duterte to resign? Speculation over the health of President Duterte continued this week following the announcement that he would be working from home in order to “have some rest”. Since becoming president in 2016, …
15th November 2019
Slowdown in growth has further to run GDP growth in Malaysia slowed in the third quarter, and we think the economy is likely to lose more steam in the quarters ahead due to headwinds from tighter fiscal policy and a weak external environment. GDP growth …
It was no surprise that the central bank in the Philippines (BSP) left its main policy rate at 4.00% today, and it is unlikely to adjust rates at its December meeting either. But with growth likely to disappoint and inflation set to remain subdued, we …
14th November 2019
There is no immediate threat of any country in Emerging Asia falling into a prolonged period of deflation, but persistently weak price pressures are likely to remain a worry for central banks and will tip the balance towards more easing over the coming …
13th November 2019
GDP growth in Sri Lanka is likely to remain weak whichever of the two main candidates wins the presidential election on Saturday. Sri Lanka’s presidential election will take place on 16 th November. A record 35 candidates have filed nominations for …
12th November 2019
Indonesia’s GDP figures lack credibility – economic growth has been far too stable over the past few years to be believable. We think a better guide to the health of the economy is our own Indonesia Activity Tracker (IAT). This shows that economic growth …
11th November 2019
Philippines: more easing in 2020 Governor Diokno was pretty emphatic earlier this week when he said that the central bank (BSP) had “absolutely” “done more than enough” this year. In response we are taking out the interest rate cut we originally had …
8th November 2019
Growth jumps, but this is not the start of a sustained rebound The jump in growth in Q3 was mainly driven by temporary factors relating to the delayed 2019 budget. Once this distortion drops out, we expect growth to settle at around 6.0% as a tough …
7th November 2019
The Bank of Thailand (BoT) cut its key policy rate to 1.25% today, and with economic growth set to remain weak and concerns about the strength of the baht mounting, we think the central bank will loosen policy again next year. Today’s decision was …
6th November 2019
Bank Negara Malaysia (BNM) left its policy rate unchanged at 3.00% today, but with growth set to slow sharply over the next few quarters and inflation likely to remain subdued, we think the central bank will ease policy again early next year. 16 of the 25 …
5th November 2019
Official figures overstate health of economy GDP growth in Indonesia has been suspiciously stable at around 5% over the past five years, and it was no surprise that it recorded another quarter of growth at this rate in the third quarter. Our Indonesia …
New financial market forecasts Having previously expected equity and currency markets to fall sharply across Emerging Asia before the end of the year, we have revised our forecasts and now expect financial markets to remain broadly stable over the next …
1st November 2019
Industry remains weak, but some hope for an improvement PMIs for Emerging Asia (ex. China) softened slightly last month and continue to suggest that industry remains weak. The PMIs for China gave mixed signals, but on balance provide some hope for a …
Sharp drop in exports not as bad as it seems Korean exports fell sharply again in y/y terms last month, but the sector is in better health than the headline data suggest. Meanwhile, Korea exited deflation in October and inflation should continue to rise …
Further progress towards the establishment of what would be the world’s biggest trade deal, the Regional Economic Comprehensive Partnership (RCEP), is expected over the weekend. Given the protectionist threat facing Asia, a deal would provide a boost to …
31st October 2019
Outperformance to continue Taiwan’s economy continued to perform strongly last quarter, thanks mainly to an acceleration in government spending and strong export growth. The outperformance of the economy is the main reason why we think the central bank …
Campaigning ahead of Sri Lanka’s presidential election, to be held on 16 th November, is well underway. President Maithripala Sirisena has already confirmed he will not stand again and will step down when his term ends on 9 th January. Altogether 35 …
30th October 2019
Taiwan – benefiting from the trade war In contrast to the rest of the region, where growth has recently been touching post-financial crisis lows, Taiwan’s economy has rebounded strongly over the past year. Our GDP Tracker, which is constructed using …
25th October 2019
The US Treasury is due to report soon which of its major trading partners, if any, have been manipulating their currencies for unfair advantage. But regardless of what the US Treasury decides, the protectionist threat from the US is unlikely to go away. …
24th October 2019
Bank Indonesia (BI) cut interest rates again today and signalled that its main priority remains supporting the struggling economy. However, if the rupiah starts to drop back against the US dollar over the coming months as we expect, then we could be …
Slow recovery next year GDP growth was sluggish in Q3, but looser fiscal and monetary policy should help the economy to regain some momentum in the quarters ahead. With external headwinds set to remain, the rebound in growth is only likely to be gradual. …
There have been suggestions that the Bank of Korea (BoK) might soon need to adopt some of the unconventional policy measures that are being tried by the world’s major central banks. However, evidence from other countries that have tried quantitative …
23rd October 2019
Early indicators suggest that GDP growth stabilised across Emerging Asia last quarter. While we think the worst is now over for the region, the recovery will be slow going. Countries in Emerging Asia are among the first in the world to publish national …
21st October 2019
More stimulus on the way in Korea GDP figures due to be released next week are likely to show Korea’s economy remained subdued in Q3 – we have pencilled in growth of just 0.4% q/q. (See our data preview below for more details.) However, with policy …
18th October 2019
The Bank of Korea (BoK) cut its policy rate from 1.50% to 1.25% today and with growth set to remain subdued and price pressures likely to remain very weak, we are expecting more easing next year. Today’s decision followed the first rate cut in three years …
16th October 2019
The two key economic challenges facing President Joko Widodo in his second term are boosting GDP growth and reducing Indonesia’s external vulnerabilities. We don’t think he will succeed in either. Following his decisive election victory in April, Joko …
15th October 2019
The Monetary Authority of Singapore (MAS) loosened policy today and given the current weakness of the economy – GDP figures also published today show growth in year-on-year terms held steady at a ten-year low – monetary policy is likely to remain …
14th October 2019
