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Thailand takes steps to combat strong baht With the baht continuing to appreciate against the US dollar, the authorities in Thailand earlier this week unveiled a couple of further measures designed to put downward pressure on the currency. The steps …
11th October 2019
Overview – Regional growth is likely to remain very weak, with slower growth in China likely to offset a modest recovery in the rest of the region. China’s economy has remained resilient in recent months. But with the boom in property construction coming …
10th October 2019
Growth looks to have stabilised in Q3 Countries across Emerging Asia are due to publish third quarter GDP figures over the coming weeks. But even before the official data are announced, it is possible to get a good idea of how growth in the region is …
4th October 2019
A weak quarter, but some signs of improvement more recently Downbeat trade data for Korea and weak regional manufacturing PMIs suggest that GDP data for last quarter are likely to be subdued again in most places, but there were some signs of improvement …
1st October 2019
Price pressures to remain weak, but deflation will be temporary Despite headline inflation in Korea dropping further into negative territory in September, we don’t think there is much risk of a damaging period of prolonged deflation. Figures released …
Data released over the weekend suggest that Vietnam grew strongly in the third quarter of the year, and we think it will remain one of the fastest growing economies in the region. The possibility that the US will introduce tariffs on its imports from …
30th September 2019
Weak Singapore data to prompt MAS to take action The poor recent performance of manufacturing in Singapore increases the chance that the Monetary Authority of Singapore (MAS) will loosen policy aggressively at its meeting next month. Figures released …
27th September 2019
Today’s cut to the policy rate by the central bank in the Philippines (BSP) from 4.25% to 4.00% is unlikely to be the last in the easing cycle. With growth likely to disappoint and price pressures set to remain subdued, we expect more cuts in the coming …
26th September 2019
The Bank of Thailand (BoT) left interest rates unchanged at 1.50% today, but 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 before the end of the year. …
25th September 2019
The Indonesian government’s budget for 2020 came a step closer to being passed this week after the parliament’s budgetary committee approved President Joko Widodo’s spending plans for the coming year. Although spending is set to rise by 8.5% next year, …
24th September 2019
Is Indonesia going soft on corruption? Indonesia’s parliament has approved changes to how the country’s anti-corruption body (KPK) is governed, a move which could weaken its powers to investigate new corruption allegations. Since it was launched in 2002, …
20th September 2019
Taiwan’s central bank (CBC) left its key policy rate unchanged today at 1.375%, and with growth picking up we doubt it will be in any rush to join the region’s rate cutting cycle. We expect interest rates to be left on hold until at least the end of next …
19th September 2019
Sri Lanka’s economy held up better than we had expected last quarter given the drag from the recent terrorist attacks on the country. But we suspect that the published figures overstate the real strength of the economy. With the tourist sector likely to …
Today’s rate cut by Bank Indonesia (BI) clearly signals that its main priority at the moment is supporting the struggling economy. While we think further easing is likely, the central bank is likely to tread cautiously over the coming months. The rate …
Weak economic growth and low inflation mean Emerging Asia’s rate cutting cycle has further to run. In contrast, the consensus and financial markets think the easing cycle will soon end in many countries. Having raised interest rates steadily throughout …
18th September 2019
Vietnam’s decision to cut interest rates today is something of a surprise given that growth appears to be holding up well at the moment. Given the decent outlook for the economy, we don’t think the central bank will rush into cutting rates again soon. The …
13th September 2019
Strong baht not to blame for weak exports Policymakers and exporters in Thailand are once again voicing concern about the strength of the baht, which has appreciated again this week and is now approaching a six-year high against the US dollar. Since the …
The dovish statement which accompanied today’s decision by Bank Negara Malaysia (BNM) to leave its policy rate on hold at 3.00% suggests that the central bank is leaving the door open to further easing. We are sticking with our forecast that the Bank will …
12th September 2019
Deflation fears in Korea overblown Despite headline inflation in Korea (just) dropping into negative territory in August, we don’t think there is much risk of a prolonged period of deflation. Headline inflation fell to minus 0.04% last month – the first …
6th September 2019
Yesterday’s announcement by Hong Kong Chief Executive Carrie Lam that the government will withdraw the controversial extradition bill that sparked the current political crisis has raised hopes that tensions in the territory will start to subside. But …
5th September 2019
Few signs of green shoots so far in Q3 Weak trade data for Korea and the weakness of regional manufacturing PMIs in August suggest that economic conditions failed to improve in the middle of this quarter. While we suspect that regional GDP growth has …
2nd September 2019
Korea 2020 budget boost Korea’s proposed budget for 2020 includes a large fiscal boost, which should partially offset the external headwinds facing the economy. The draft budget will be submitted to the National Assembly next week and envisages an …
30th August 2019
The Bank of Korea sounded more bearish on the outlook for the economy even as it left rates on hold today. As such, we continue to expect more easing this year, with another 25bps cut in October. Today’s decision followed the first rate cut in three years …
Despite the poor global outlook, GDP growth across Emerging Asia actually picked up slightly in the second quarter, and our forecast is for a further gradual recovery over the remainder of the year and into 2020. (See here .) One of the key risks facing …
26th August 2019
Philippines budget: three key takeaways Earlier this week the government in the Philippines unveiled its budget plans for next year. There are three key points worth highlighting. First, while the government has been touting the boost to economic growth …
23rd August 2019
The Central Bank of Sri Lanka (CBSL) cut rates today, but given our view that the rupee will come under pressure again this year, we think this will probably mark the last cut in 2019. Today’s decision by the CBSL to cut both its deposit and lending rate …
Despite the recent weakness of the rupiah, Bank Indonesia (BI) today cut its benchmark interest rate for the second consecutive month to 5.50% and hinted that further easing is on the horizon. But the uncertain outlook for the currency means any further …
22nd August 2019
For all the bad news on the global economy recently, it looks as if GDP growth across Emerging Asia held broadly stable last quarter. Although growth is likely to remain fairly weak over the coming year, with fiscal and monetary policy being loosened, we …
21st August 2019
Weak growth to continue GDP figures released today for the second quarter show that growth in Thailand slowed sharply to an almost five-year low. With weak global demand and a downturn in the tourism sector likely to drag on growth prospects over the …
19th August 2019
Global recession fears Weak data earlier this week from China and Europe, the worsening political crisis in Hong Kong and the fall in long term bond yields in the US have all helped raise fears of a sharp slowdown in global economic growth. While we think …
16th August 2019
Weakness to follow after resilient first half GDP growth in Malaysia picked up in Q2, but we doubt this is the start of a sustained rebound. We are forecasting a renewed slowdown in the second half of this year, driven by weaker consumer spending and a …
Emerging Asia has not only been the fastest growing region since the global financial crisis, it has also been the most stable. Regional growth has also been less volatile compared with the period before the financial crisis. This “great moderation” is …
14th August 2019
An official from the Monetary Authority of Singapore (MAS) today confirmed that it is not considering an unscheduled policy adjustment, but given the poor outlook for the economy loosening in October is still very likely. Singapore’s Ministry of Trade and …
13th August 2019
Today’s 25bp cut from the central bank in the Philippines (BSP) came as no surprise, and with inflation set to fall back further and growth only likely to stage a moderate recovery over the coming months, we expect another 25bp cut before the year is …
8th August 2019
New currency forecasts In response to the renewed falls in Asian financial markets over the past week and the further escalation of the trade war between the US and China, we are revising some of our currency forecasts for this year. The drop in the …
Weak growth to prompt more aggressive policy easing The continued weakness of growth means that the central bank will likely opt for a more aggressive 50bp policy rate cut this afternoon. And while growth should recover from here, don’t expect a strong …
The fall in Pakistan’s stock market today is the first sign that investors are starting to become concerned about the escalating crisis in Kashmir. The most likely outcome is that tensions are dialled back over the coming days, but even a period of …
7th August 2019
Weak growth and a strong currency were the main factors behind today’s surprise rate cut in Thailand. With the economy likely to slow further and the currency likely to continue to strengthen over the coming months, we think the central bank will cut …
Currencies from the rest of Asia have fallen back sharply following today’s drop in the renminbi to below 7.0 against the US dollar, and are likely to weaken further over the coming months. While weaker currencies are unlikely to stop central banks from …
5th August 2019
Growth to remain weaker than the official figures show 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 close to this rate in the second …
Japan’s decision to remove Korea from its list of trusted trading partners looks set to cause significant short-term disruption to Korea’s economy, and is likely to prompt the Bank of Korea (BoK) to cut interest rates sooner than we had previously …
2nd August 2019
Mixed Q2 GDP figures, signs of export revival Second quarter GDP figures will be coming in thick and fast over the next few weeks. For the countries that have reported already, the numbers have been a mixed bag. In q/q terms, growth slowed in Hong Kong …
July PMIs give slightly better news, but still point to weakness PMI readings for Emerging Asia were slightly more positive at the start of Q3, but the big picture is that they remain low by past standards and there are few signs of a meaningful …
1st August 2019
No sign of a turnaround Korea’s trade data suggest that a meaningful recovery in the external environment remained elusive at the start to the second half of the year, with weakness in the technology sector and slowing demand from China continuing to …
Q2 unlikely to mark the start of a strong recovery GDP growth in Taiwan rebounded strongly last quarter, thanks mainly to a surprise acceleration in export growth. But with headwinds to the economy mounting, we don’t expect the recovery to last. Figures …
31st July 2019
MAS to loosen sooner rather than later The recent deterioration in the economic data from Singapore adds weight to our view that monetary policy will be loosened before the central bank’s (MAS) next scheduled meeting in mid-October. The advanced Q2 GDP …
26th July 2019
Growth unlikely to carry on climbing after Q2’s rebound The strength of growth in Q2 more than offset the contraction in Q1, but with the economy still likely to face large external headwinds in the second half of this year, a sustained upturn is …
25th July 2019
The jump in the headline rate of inflation in Malaysia last month to 1.5% y/y from 0.2% in May, is unlikely to trouble the central bank (BNM). The rise was due to the effects of the elimination of the Goods and Services Tax (GST) in June 2018 dropping out …
24th July 2019
Plans for further big minimum wage hike scrapped President Moon was elected in 2017 on a pledge to raise household incomes and reduce inequality. The cornerstone of his strategy was to raise the hourly minimum wage to 10,000 won (US$8.50) by 2020, which …
19th July 2019
Bank Indonesia (BI) today cut its benchmark interest rate from 6.0% to 5.75% and hinted that further easing is on the horizon. But the uncertain outlook for the currency means that this is unlikely to be the beginning of a prolonged easing cycle. Today’s …
18th July 2019
