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Pakistan looks to be close to agreeing the terms of a bailout package with the IMF. As the price for a deal, the IMF is likely to demand a further sharp tightening in fiscal and monetary policy as well as structural reforms aimed at raising more revenue …
5th April 2019
Although neither candidate in Indonesia’s presidential election has unveiled policy proposals that are likely to address the long-standing constraints which are holding back growth, another term for Joko Widodo would pose fewer risks to the economy. … …
4th April 2019
PMIs rose across much of Emerging Asia last month. But it’s too soon to call a turning point. The PMIs for the region’s biggest manufacturing sectors still point to a contraction in output, while timely Korean export data suggest that there has been …
1st April 2019
The State Bank of Pakistan (SBP) today raised its policy rate by a further 50bp to 10.75%, and we think further rate hikes are likely over the coming months due to worries about high inflation and the country’s large current account deficit. … Pakistan …
29th March 2019
The recent economic data from across Emerging Asia have continued to disappoint. Our Emerging Asia GDP Tracker suggest the regional is now growing at its weakest pace in three years. Meanwhile, Thailand looks set for a period of prolonged political …
Vietnam’s economy expanded at a decent pace in the first quarter of the year, but with exports set to remain weak and fiscal policy being tightened, we expect growth to slow over the next couple of years. … Vietnam GDP …
Malaysia’s central bank (BNM) today dropped its clearest hint yet that interest rate cuts are on the way after it lowered its growth forecasts for this year and pledged that monetary policy would be supportive. In its annual report, BNM cut its GDP growth …
27th March 2019
Thailand looks set for a period of political and economic uncertainty after the military and the main opposition party claimed victory in yesterday’s general election. The inconclusive result increases the risk of protests and violent conflict, which …
25th March 2019
The past week has brought further bad news on the trade front, with more countries reporting a decline in exports. A turn in the electronics inventory cycle, the trade war and weaker global demand are the three main factors behind the recent slump in …
22nd March 2019
Bank Indonesia (BI) left rates unchanged at 6.0% at its meeting today, and there was little indication in the statement that it is likely to adjust monetary policy anytime soon. We expect rates to remain on hold throughout this year. … Indonesia: no more …
21st March 2019
Taiwan’s central bank (CBC) decided to keep its policy rate unchanged today at 1.375% against a backdrop of weak economic growth and low inflation, and gave no indication in its statement that it will adjust policy any time soon. With monetary policy …
The central bank of the Philippines (BSP) left rates unchanged today at Governor Diokno’s first meeting, but also sounded more hawkish than we had anticipated. Nevertheless, with inflation set to fall back further over the next couple of months, we are …
The Bank of Thailand (BoT) left interest rates on hold today but sounded decidedly more dovish than at its previous meeting. While weak growth and low inflation will take hikes off the table, the BoT’s continued concern over risks in the financial sector …
20th March 2019
GDP growth in Sri Lanka slowed sharply in the final quarter of last year, and although we expect growth to pick up a little over the coming quarters, a combination of tighter fiscal and monetary policy mean growth is likely to remain subdued. … Sri Lanka …
19th March 2019
Economic growth in the Philippines is likely to slow unless the 2019 budget is approved soon, but the cuts the government has announced to its GDP growth forecast for this year look too severe. We think the growth forecasts have been revised partly for …
15th March 2019
Thailand’s upcoming election will do little to improve the economic outlook. Whoever wins, the shift towards economic populism is likely to continue, delaying reforms needed to raise productivity growth and deal with the worsening demographic outlook. … …
14th March 2019
Remittance growth to the Philippines has slowed steadily over the past decade and looks set to remain subdued over the next few years. While weak remittance growth is likely to act as a drag on consumption and investment, overall GDP growth should …
An early rate cut in the Philippines is looking increasingly likely after the country’s new central bank governor, Benjamin Diokno, told a news conference on Friday that “given the decelerating inflation in the Philippines, there is an opportunity for …
8th March 2019
Inflation across Emerging Asia has fallen back sharply in recent months and is likely to remain low over the coming quarters. With growth also set to slow, we expect some central banks to start cutting interest rates this year. … Inflation to remain low, …
7th March 2019
Bank Negara Malaysia (BNM) today left interest rates unchanged, but with price pressures very weak and growth set to slow, we think that rate cuts will soon come onto the agenda. … Rates on hold in Malaysia, but cuts are likely this …
5th March 2019
February’s drop in inflation to within the target range, and the appointment of a dovish new central bank (BSP) governor, increases the chance of a rate cut next quarter. But the surprise pick of Benjamin Diokno as governor may raise questions about the …
There were few positives in the February PMIs, with the headline readings pointing to another broad-based deterioration in regional manufacturing conditions. The chances of an improvement in the near term look slim – the forward-looking new export orders …
4th March 2019
Economic growth in Emerging Asia accelerated slightly last quarter, but we doubt this is the start of a sustained rebound. We expect growth to remain weak over the coming quarters. … Acceleration in growth unlikely to …
1st March 2019
The Bank of Korea (BoK) left interest rates unchanged today at 1.75%, but sounded a little more worried than previously about the outlook for the economy. We are sticking with our view that interest rates will remain on hold for this year, but the risks …
28th February 2019
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 …
27th February 2019
Ahead of his meeting with Kim Jong Un in Hanoi this week, Donald Trump tweeted that North Korea had “more potential for rapid growth than any other”. While North Korea’s natural resources, geographical location and low labour costs mean its economy has …
26th February 2019
Indonesia’s current account deficit should narrow this year, but not by enough to persuade the central bank to lower interest rates, as some analysts are now predicting. … Where next for Indonesia’s current …
22nd February 2019
The weak Korean export figures for the first 20 days of February that were published earlier this week suggest that the region’s export downturn is intensifying. Looking ahead, the highlight of the coming week is Donald Trump’s planned meeting with Kim …
The possibility of political unrest ahead of Thailand’s election next month is one of the key risks facing the economy, but so far at least, the uncertainty is having little impact on the currency. The Thai baht is up 5% since the start of the year, …
21st February 2019
Bank Indonesia (BI) left interest rates unchanged at its meeting today, and given the improved performance of the rupiah as well as the less hawkish tone of the central bank’s press conference, we are taking out the two rate hikes that we previously had …
GDP growth in Thailand picked up in Q4, but it is likely to struggle for momentum in the quarters ahead due to weaker external demand. The key risk to the outlook is the possibility of unrest if the electorate feels it is being denied free and fair …
18th February 2019
The weak Q4 GDP figures for Singapore that were released earlier today reaffirm our view that monetary and fiscal policy will be loosened this year. Meanwhile, the widening of Indonesia’s trade and current account deficits make it likely Bank Indonesia …
15th February 2019
In this Focus , we assess how effective various indicators are for tracking economic growth in the region. The trade volume figures and our proprietary GDP Trackers provide the best guide to the state of activity. Both series suggest that regional growth …
14th February 2019
The rise in GDP growth to 4.7% y/y in Q4, from 4.4% in Q3, was the first pick-up in five quarters, but we think that there is little chance of a sustained rebound. Softer external demand coupled with a number of domestic headwinds means that economic …
January data suggest that a sharp minimum wage hike at the beginning of the year weighed on hiring, and is likely to depress job creation throughout 2019. The poor health of the labour market is set to act as a major drag on growth this year. … Korea …
13th February 2019
The nomination of Princess Ubolratana Rajakanya Sirivadhana Varnavadi (sister of the current king) as a prime ministerial candidate in Thailand’s upcoming general election, has completely changed the political landscape of the country. There is clearly a …
8th February 2019
The central bank in the Philippines (BSP) left interest rates unchanged today, but with inflation set to continue falling back over the coming months, we think that the BSP will soon start to unwind some of last year’s monetary tightening. … Philippines: …
7th February 2019
The Bank of Thailand (BoT) left interest rates on hold today, but sounded surprisingly upbeat on the outlook for the economy. While this suggests that a further rate hike cannot be entirely ruled out, we are sticking with our view that interest rates will …
6th February 2019
Official figures show GDP growth in Indonesia was unchanged at 5.2% y/y in the final quarter of the year, but with exports set to slow and monetary policy likely to be tightened further, we think activity will drop back over the coming quarters. … …
The continued rebound in the rupiah means that further interest rate hikes by Bank Indonesia (BI) are unlikely in the near term, but we think it is too early to call an end to the central bank’s tightening cycle. Meanwhile, despite its precarious balance …
1st February 2019
The January PMIs for Emerging Asia make for grim reading, with the headline number falling across the region. Meanwhile, the weakness in the new export orders component and a further slowdown in Korean export growth supports our view that Asian exports …
GDP growth in Taiwan slowed last quarter in y/y terms to the weakest pace since 2016 on the back of cooling investment. Although domestic demand should remain relatively healthy, with headwinds to the export sector building, we expect growth to stay tepid …
31st January 2019
The slump in Asian exports late last year was mainly due to a sharp fall in demand for electronic products, which most likely reflects a turn in the sector’s inventory cycle. The poor prospects for the technology sector are another reason why Asian growth …
30th January 2019
Following a flurry of interest rate hikes towards the end of last year, policymakers in Emerging Asia have struck a more dovish tone in recent weeks. The central banks of Indonesia, Korea and Malaysia all left interest rates unchanged at their first …
29th January 2019
Peace in the restive southern province of Mindanao, the second biggest island in the Philippines, could lead to big economic gains for the island itself, but is unlikely to have much impact on overall growth in the Philippines. Meanwhile, despite signs …
25th January 2019
Bank Negara Malaysia (BNM) today left interest rates unchanged, but the slightly more dovish statement supports our view that rate cuts will creep onto its agenda later this year. Whereas the consensus is expecting interest rates in Malaysia to be left on …
24th January 2019
Today’s decision from the Bank of Korea (BoK) to keep rates on hold, and the downgrade in its forecasts, adds weight to our view that rates are likely to remain on hold throughout 2019. … Bank of Korea unlikely to raise rates this …
GDP growth in the Philippines was virtually unchanged in Q4 and we expect it to settle at around 6.0% in 2019, falling short of both government targets and the consensus view. … Philippines GDP …
Weaker growth in China is already weighing on exports from the rest of Asia, and a further slowdown in the economy is one of the biggest risks clouding the outlook for the rest of the region. A slump in China would hurt economies with close trade links, …
22nd January 2019
Economic growth in Korea was surprisingly strong last quarter, but with both domestic and external headwinds to growth likely to mount this year, we doubt this strength will last. … Korea GDP …
