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We think that there is little chance of a sustained rebound following Malaysia’s weak Q3 GDP figures. Softer external demand coupled with a number of domestic headwinds means that economic growth is instead more likely to slow next year. … Malaysia GDP …
16th November 2018
Today’s surprise 25 basis point interest rate hike by Bank Indonesia (BI) clearly indicates that the central bank’s main focus will be on supporting the currency and reducing the country’s external vulnerabilities. With downward pressure on the rupiah …
15th November 2018
With inflation set to drop back steadily over the coming months, we think today’s rate hike by the central bank of the Philippines (BSP) will be the last in the current cycle. … Philippines: Today likely to be the last hike in the …
The Bank of Thailand (BoT) left interest rates unchanged at 1.50% today, but the hawkish tone of the accompanying statement suggests that a rate hike is now only a matter of time, as the central bank looks to clamp down on growing risks in the financial …
14th November 2018
The decision by the Central Bank of Sri Lanka (CBSL) to hike its main policy rates underlines its concerns about the weakness of the currency. Policy over the months ahead will depend on the political situation. For now we are forecasting no further …
Most governments in Emerging Asia have room to support their economies by loosening fiscal policy further in the event that growth continues to disappoint. However, a few countries, namely Malaysia, Pakistan and Sri Lanka, have very little room for …
13th November 2018
The opening up of Vietnam’s economy has gathered pace over the pace couple of months, with the government pressing ahead with a series of reforms which should boost the country’s economic prospects. Regional growth looks to have slowed in Q3. Of the six …
9th November 2018
Bank Negara Malaysia today left interest rates unchanged at 3.25% and gave no hint in its accompanying statement that it is in a rush to change its policy stance anytime soon. Whereas the consensus is expecting the central bank to resume its tightening …
8th November 2018
We expect the slowdown in GDP growth in Q3 to continue over the coming quarters as the economy faces headwinds from tighter monetary policy and a weakening external environment. … Philippines GDP …
Indonesia’s GDP growth slowed from 5.3% y/y in Q2 to 5.2% in Q3, and looks set to slow a little further over the coming quarters due to a combination of tighter monetary policy and weaker export demand. … Indonesia GDP …
5th November 2018
Inflation can now be added to the list of problems facing Pakistan after figures published today showed headline inflation rose to a four-year high last month. Meanwhile, the chances of an improvement in policymaking look to be receding, with Prime …
2nd November 2018
The announcement that the Trans-Pacific Partnership will come into force on 30th December is important in a number of ways. Not only should it provide a boost to growth prospects across parts of Asia, but it also shows that, despite the shift towards …
The October PMIs for Emerging Asia indicate that the region’s manufacturing sectors lost further momentum at the start of Q4. Meanwhile, the weakness in new export orders supports our view that the recent resilience in Asian exports is unlikely to last. … …
1st November 2018
The current political crisis in Sri Lanka, which has seen the country’s president, Maithripala Sirisena, replace Prime Minister Ranil Wickremesinghe with former President Mahinda Rajapaksa, comes at a bad time for the economy. Growth has been very weak …
31st October 2018
GDP growth in Taiwan slowed last quarter, mainly due to a sharp slowdown in export demand. With external headwinds set to increase, we think growth will continue to slow. … Taiwan GDP (Q3 …
Pakistan this week secured a US$6bn loan from Saudi Arabia and has plans to court Chinese money. These deals may help paper over the cracks, but they won’t solve the economy’s balance of payments problems. For that, an IMF package with economic reform …
26th October 2018
Korea’s economy struggled for momentum in Q3, and we think that this is set to continue – mounting external and domestic headwinds suggest growth is likely to ease back over the coming quarters. … Korea GDP …
25th October 2018
Today’s decision by Bank Indonesia (BI) to leave interest rates on hold is unlikely to mark the end of the current tightening cycle. With the rupiah likely to remain under downward pressure over the coming months, we still expect two more rate hikes …
23rd October 2018
The election of former Malaysian deputy prime minister Anwar Ibrahim to the parliamentary seat of Port Dickinson last weekend bodes well for reform prospects in the country. A slump in Chinese tourists visiting Thailand will weigh heavily on economic …
19th October 2018
The Bank of Korea (BoK) left interest rates unchanged today, but appeared to leave the door open to a rate hike soon. However, with growth set to slow, trade tensions building and inflation likely to drop back, we are sticking with our view that interest …
18th October 2018
Even if a planned election for next year passes smoothly, political uncertainty is likely to remain a drag on Thailand’s growth prospects. … Thailand: Elections will not improve long-run …
16th October 2018
There are good reasons for the Bank of Thailand not to hike interest rates at its next meeting, as it currently appears determined to do. But currency strength is not one of them. … Thailand: strong baht will not stop rate …
15th October 2018
The head of the IMF, Christine Legarde this week set the tone for what are likely to be tough negotiations with Pakistan when she said the Fund would require Pakistan to be “absolutely transparent” about its debts. As the price for any deal, the IMF is …
12th October 2018
The Monetary Authority of Singapore (MAS) today increased the slope of its nominal effective exchange rate policy band, a decision that amounts to a tightening of its policy stance. But with growth likely to ease over the coming year and inflation set to …
The US Treasury is due to report soon which of its major trading partners, if any, have been manipulating their currencies for unfair advantage. Vietnam is currently the only country in Emerging Asia that meets all three of the criteria previously laid …
11th October 2018
Even if the current drift towards an all-out trade war between the US and China is halted (which we doubt), weaker global demand will drag on regional exports. With domestic demand also likely to struggle in many places, we think GDP growth across the …
9th October 2018
As the price for a deal with Pakistan, 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 and improving the business environment. Although growth is likely to …
Inflation in the Philippines rose to a fresh nine-year high in September, but even if it starts to drop back over the coming months, pressure is likely to remain on the central bank (BSP) to tighten policy further. Elsewhere, the central banks of …
5th October 2018
The biggest impact of a period of sustained higher oil prices would be in India and the Philippines, whose current account deficits would be pushed even more into the red, putting further downward pressure on their currencies. For most of the region, …
4th October 2018
The State Bank of Pakistan (SBP) hiked interest rates by a further 100bp on Saturday and made clear in its policy statement that tackling the country’s mounting external imbalances remain its priority. We think further rate hikes are likely before the end …
1st October 2018
The September PMIs for Emerging Asia indicate that the region’s manufacturing sectors lost momentum in Q3. Meanwhile, the weakness in new export orders further supports our view that the recent resilience in Asian exports is unlikely to last. … …
The Philippines and Indonesia hiked interest rates on Thursday, and it is only likely to be a matter of time before other central banks in the region follow them. Pakistan’s central bank is likely to raise interest rates over the weekend, while the …
28th September 2018
Vietnam’s economy recorded another quarter of solid growth in the third quarter of the year. But with exports set to weaken and fiscal policy being tightened, we expect growth to slow over the next couple of years. … Vietnam GDP …
Taiwan’s central bank (CBC) decided to keep its policy rate on hold today at 1.375% against a backdrop of strong economic growth and low inflationary pressures. The fairly dovish tone of the CBC’s accompanying statement, which highlighted increasing …
27th September 2018
Today’s 50bp rate hike in the Philippines comes in response to a further rise in inflation and is unlikely to be the last in the current cycle. We are expecting rates to rise by at least a further 50bp before the end of the year. … More rate hikes likely …
Today’s 25 basis point rate hike by Bank Indonesia is unlikely to be the last in the current cycle. With the rupiah set to remain under downward pressure over the coming months, we expect at least two more rate hikes before the end of the year. … Further …
The revised Korea-US free trade agreement (KORUS) that was formally signed yesterday removes one of the potential downside risks for Korean exporters. However, with the US-China trade war intensifying and concerns remaining that the US will push ahead …
25th September 2018
Campaigning ahead of next April’s presidential election in Indonesia officially got underway at the weekend, with President Joko Widodo (also known as Jokowi) set to take on former general, Prabowo Subianto, in a repeat of the 2014 election. In order to …
24th September 2018
Rising inflationary pressures in the Philippines mean the country’s central bank is likely to raise interest rates by 50bp at its meeting next week. Bank Indonesia is also likely to raise rates, but probably by just 25bp. Meanwhile, the region’s financial …
21st September 2018
The Bank of Thailand (BoT) left its policy rate unchanged at 1.50% today, but the hawkish tone of accompanying statement suggests that rate hikes are in the pipeline. With inflationary pressures very low, worries over the strength of the currency mounting …
19th September 2018
US plans to impose tariffs on an additional $200bn of Chinese imports are unlikely to have a significant impact on most economies in Emerging Asia, including China. Over the long term there could even be some benefits for the rest of the region if a trade …
18th September 2018
A widening trade deficit in the Philippines has put renewed downward pressure on the peso over the past week, creating a further headache for the central bank. Meanwhile, in Korea, the recent weakness of the labour market may prompt the president to …
14th September 2018
Asian exports are holding up well for now, but this strength is unlikely to last. Even if the current drift towards an all-out trade war between the US and China is halted (which we doubt), weaker global demand will drag on regional exports. With domestic …
13th September 2018
Indonesia and the Philippines are likely to tighten monetary policy aggressively over the rest of this year. The Philippines may even call an emergency policy meeting in the face of soaring inflation. But these two countries are the exceptions. With the …
12th September 2018
Korea’s labour market has deteriorated significantly in recent months, and August data due tomorrow are likely to show that conditions remain weak. The government unveiled plans for a sharp rise in spending on job-creation programmes in its budget last …
11th September 2018
The central bank governor of the Philippines, Nestor Espenilla, today all but confirmed that interest rates will be raised soon, possibly in an emergency meeting before the BSP is next scheduled to meet on 27 th September. Meanwhile, weak activity data …
7th September 2018
Supporting the rupiah is increasingly becoming the central pre-occupation for Bank Indonesia and the government. We think the central bank will raise interest rates at least twice more before the end of the year, causing growth to slow. … What next for …
6th September 2018
The macro impact of the recent falls in Asian markets is likely to be relatively small for most economies. The exceptions are the Philippines and Indonesia, where weaker currencies have forced policymakers to tighten policy aggressively. We expect …
5th September 2018
With growth easing and inflation very low, Bank Negara Malaysia’s decision to leave its main policy rate on hold at 3.25% today was no surprise. While the risks are skewed towards looser policy, we expect rates to stay on hold throughout this year and …
The August PMIs for Emerging Asia suggest that the region’s manufacturing sectors remained lacklustre. Meanwhile, Korean export data suggest export growth in the rest of the region stayed robust last month. … Manufacturing PMIs …
3rd September 2018
