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The Bank of Korea (BoK) today cut interest rates by 25bp to 1.50% and signalled that further easing is on the way. Given the poor outlook for growth and the change in sentiment by the central bank, we now think interest rates will be cut a further two …
18th July 2019
Early indicators suggest that GDP growth slowed sharply across Emerging Asia in the second quarter. Although most countries should stage a gradual recovery over the coming year, growth is likely to remain much weaker than the consensus and the IMF expect. …
17th July 2019
Pakistan’s central bank (SBP) today raised its benchmark interest rates by a further 100bp amid continued concerns about high inflation and the country’s current account deficit. With inflation set to rise further over the coming months and the external …
16th July 2019
How will policymakers respond to a strong baht? Policymakers and exporters in Thailand are once again voicing concern about the strength of the baht, which has appreciated by over 5% against the US dollar since January and is up by just under 9% against …
12th July 2019
Slowest growth in a decade The advanced estimate of Singapore’s GDP suggest the economy performed very poorly last quarter. Although the economy should start to pick up a little over the coming quarters, helped by looser fiscal and monetary policy, growth …
Overview – We expect economic growth across Emerging Asia to remain weak this year, with many countries set to grow at their slowest pace in a decade. China’s economy has stabilised in recent months thanks in large part to a resilient property sector. But …
11th July 2019
Bank Negara Malaysia’s (BNM) left interest rates unchanged at 3.0% today, but kept the door open to further easing. With growth set to slow in the second half of the year, we think the central bank will cut interest rates again soon. Today’s decision came …
9th July 2019
Korea-Japan spat – should we be concerned? The restrictions that Japan has announced on the sale of certain technology products to Korea could, if fully implemented, have a significant effect on Korea’s economy. However, past experience suggests that it …
5th July 2019
Renewed drop in inflation to continue The renewed drop in inflation in June is likely to continue as the headline rate is dragged down by falling food and fuel price inflation, providing a green light for the central bank to cut rates in August. Today’s …
The policy tightening and structural reforms that Pakistan has agreed to as the price of a deal with the IMF are likely to lead to a sharp slowdown in economic growth in the near-term but should also help to put the economy on a more secure footing. The …
4th July 2019
June data point to a weak end to Q2 Very weak trade data for Korea and the fall in the manufacturing PMIs in June suggest that economic conditions deteriorated at the end of last quarter. After a weak Q1, GDP growth looks unlikely to have improved much, …
1st July 2019
Vietnam in Trump’s crosshairs Vietnam has emerged as the biggest winner of the US-China trade war. Vietnam’s exports to the US have shot up by around 50% since the middle of last year as US demand has shifted away from China towards alternative suppliers. …
28th June 2019
Strong exports supporting growth Vietnam’s economy grew strongly in the second quarter of the year and the economy is likely to perform well over the coming year, helped by booming exports to the US. We have reservations about the reliability of Vietnam’s …
A rebound in government spending is likely to provide a boost to GDP growth in the Philippines over the next few quarters. Fiscal data published earlier this week from the Bureau of the Treasury show that government spending is starting to recover. In May …
27th June 2019
The trade war between the US and China so far appears to have had a small negative impact on most of the region, although some countries, most notably Vietnam, look to be benefiting as US demand has shifted away from China towards alternative …
26th June 2019
The Bank of Thailand (BoT) left interest rates unchanged today and gave little hint that it was preparing to follow other central banks in the region by loosening monetary policy. We expect interest rates to be left unchanged at 1.75% throughout 2019. …
After a very weak first quarter that saw GDP growth in many countries drop to a post-financial crisis low, the most recent data suggest growth across Emerging Asia has continued to slow. Weak growth is likely to prompt further interest rate cuts over the …
21st June 2019
Taiwan’s central bank (CBC) left interest rates unchanged today at 1.375%, and is likely to be in little rush to cut interest rates despite the poor outlook for growth. We expect interest rates to be left on hold until at least the end of this year. … …
20th June 2019
Bank Indonesia today left its policy rate unchanged at 6.0% but the decision to cut the reserve requirement ratio and the dovish shift in the central bank’s rhetoric suggests interest rates are likely to be cut soon. We now expect one 25bp rate cut this …
The central bank in the Philippines (BSP) kept its policy rate unchanged at 4.50% today, but it clearly left the door open to further easing. With inflation likely to fall back further over the coming months and growth set to disappoint, we expect two …
GDP growth in Sri Lanka accelerated in the first quarter of the year, but with tourism arrivals collapsing following the Easter Sunday terrorist attacks, growth is likely to slow sharply this year. … Sri Lanka GDP …
19th June 2019
Expectations that the US will soon start to cut interest rates have provided a boost to Asian currencies in recent weeks. But if we are right that slowing growth in the US and the escalating trade war will cause investors to become more risk averse, Asian …
18th June 2019
The current account deficit of the Philippines widened again last quarter and is likely to remain a key source of vulnerability over the coming year. … Philippines Current Account (Q1), Remittances …
17th June 2019
Policymakers in Korea finally seem to be coming around to our view that rate cuts are needed to support the struggling economy after BoK Governor hinted that the central bank “must take appropriate measures to accommodate changes in economic conditions.” …
14th June 2019
The Korean government has made some welcome progress over recent years in encouraging more women into formal employment. But even if this trend continues, the size of the workforce in Korea looks set to fall sharply over the coming years, weighing heavily …
With productivity slowing and working age populations set to start falling across most of Asia, we expect regional growth to slow to just 3.5% in a decade’s time. This compares with average growth of 6.0% over the past 10 years. Our forecasts are much …
12th June 2019
Bank Indonesia has given further hints that it is preparing to cut interest rates, but given the poor outlook for the rupiah, we think the policy rate will remain unchanged this year. Meanwhile, confirmation that former general Prayuth Chan-ocha has been …
7th June 2019
The unexpected uptick in inflation in May mainly reflected temporary factors and is unlikely to preclude further rate cuts from the central bank. We are sticking with our forecast for two more cuts in 2019. … Philippines CPI …
5th June 2019
Weak PMI readings and the deterioration in Korea’s export data suggest that the regional economy is likely to have endured another quarter of disappointing growth in Q2, dashing hopes of a quick rebound. … Manufacturing PMIs, Korea Trade …
3rd June 2019
The Central Bank of Sri Lanka (CBSL) was able to cut rates today as a result of the resilience of the currency, but we doubt this will last. We think that the rupee will come under pressure again this year, limiting the scope for further loosening. … Sri …
31st May 2019
Signs that Philippines inflation continued to tumble in May suggest that the easing cycle there has further to run. Meanwhile, easing is also likely in Malaysia, Korea and Singapore in the second half of this year, despite all three countries recently …
The Bank of Korea (BoK) kept its main policy rate on hold today in the face of a clear cut case for looser policy, but we think it will eventually change its stance. With the Bank likely to be looking back at a second quarter of disappointing growth at …
With the trade war between the US and China continuing to escalate, a clear winner is starting to emerge: Vietnam. Since around the middle of last year, Vietnam’s exports to the US have shot up by around 50% in seasonally-adjusted terms, as US demand has …
29th May 2019
Growth slowed sharply in Emerging Asia last quarter, and is likely to remain fairly weak over the coming year, with looser fiscal and monetary policy unlikely to offset the drag from weaker global demand. … Weakest growth in a decade, further weakness …
27th May 2019
The 6% decline in the Korean won since the start of the year does not pose a major threat to the economy. However, policymakers are clearly irked by the decline in the currency, with officials from the Bank of Korea describing the decline as “excessive”. …
24th May 2019
GDP growth in Thailand slowed to a four-year low in the first quarter of the year, and with exports set to remain weak, we expect growth to stay subdued. The uncertain political situation is the main risk to the outlook. … Thailand GDP …
21st May 2019
Concerns about high inflation and the country’s large current account deficit mean today’s 150bp rate hike by Pakistan central bank (SBP) is unlikely to be the last in the current tightening cycle. … Pakistan hikes rates again, further tightening to …
20th May 2019
The recently announced cut to the reserve requirement ratio in the Philippines should provide a boost to economic growth and suggests that further cuts to the policy rate are likely soon. Meanwhile, the rupee came under pressure this week after Pakistan …
17th May 2019
Bank Indonesia (BI) left rates unchanged at 6.0% at its meeting today and hinted that it may consider loosening policy over the coming months. However, with the rupiah likely to lose more ground against the US dollar this year, we continue to expect …
16th May 2019
Following a slight slowdown in the first quarter, Malaysia’s economy is set to lose further momentum over the rest of the year as tighter fiscal policy, weaker consumer spending and a tough external environment weigh on growth. … Malaysia GDP …
The strong performance by Duterte’s supporters in the midterm elections should lead to further progress on pushing through economic reforms. However, the results will do little to stop the country’s slide towards autocracy, and bode poorly for the …
15th May 2019
Pakistan’s agreement with the IMF is likely to lead to slower growth and higher inflation in the short term. However, policy tightening and structural reforms should lead to an improvement in the country’s long-term prospects. … Pakistan: IMF deal to …
14th May 2019
The trade war between the US and China has so far had a very small impact on the rest of Asia, which has been dwarfed by the much bigger impact of the slowdown in global growth and the downturn in the technology sector. Even for the most exposed …
13th May 2019
In his first major policy speech since his re-election President Joko Widodo promised to press ahead with plans to boost infrastructure spending, reduce bureaucracy and open up the economy to foreign investors. But the lack of any mention of changes to …
10th May 2019
The central bank in the Philippines (BSP) cut interest rates by 25bp today, and further interest rate cuts seem only a matter of time. Given the subdued outlook for inflation and the dovish nature of today’s comments from the BSP, policy easing this year …
9th May 2019
Q1’s slump in GDP growth should be temporary, as it was mainly driven by budget delays. But hopes for a sustained rebound are likely to be disappointed. A tough external environment and the lagged effects of monetary tightening mean growth is likely to …
One year on from Mahathir’s shock re-election, the Malaysian prime minister has made some useful progress in tackling corruption, but his decision to eliminate the Goods and Service Tax (GST) and revive a number of stalled construction projects look like …
8th May 2019
Despite the downbeat outlook for Thailand’s economy, the central bank (BoT) left interest rates unchanged at its meeting today. Continued concerns over risks in the financial sector mean that it is unlikely to join other central banks from the region in …
With economic growth likely to remain weak throughout 2019, today’s 25bps rate cut by the central bank in Malaysia (BNM) is likely to be followed by further easing later in the year. … Another cut likely in Malaysia before …
7th May 2019
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 first quarter. In contrast, our Indonesia Activity Tracker suggests …
6th May 2019
