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The latest export data for Asia paint a glum picture, with December figures showing exports fell in y/y terms in China, Singapore, Indonesia, Korea, Taiwan and India. With global growth likely to slow further over the coming year, the situation for Asian …
18th January 2019
Bank Indonesia (BI) today left its policy rate unchanged for a second consecutive meeting, while there was nothing in the central bank’s statement to suggest that further rate hikes are imminent. However, given the likelihood of renewed falls in the …
17th January 2019
Emerging Asia this year is likely to grow at its weakest rate since the global financial crisis. Although fiscal policy should help to support growth in most of the region, this is likely to be offset by the lagged impact of last year’s monetary policy …
16th January 2019
With President Moon-Jae-in doubling down on his labour market policies, job growth in Korea is likely to remain weak. We think the economy this year will grow at its slowest pace since 2009. Meanwhile, Vietnam’s appeal as an investment destination was …
11th January 2019
A further sharp rise in the minimum wage in Korea at the start of this month is likely to drag heavily on the labour market again this year, further holding back employment growth and household consumption, and is one of the reasons we expect GDP growth …
8th January 2019
In this Update we take a look at the important elections that are set to take place across Emerging Asia over the coming year, assessing the implications for policymaking and economic growth. … A guide to elections in …
7th January 2019
Data published over the past week show that Emerging Asia ended 2018 on a soft note, a trend we expect to continue into 2019. Meanwhile, a further sharp drop in inflation in the Philippines in December supports our view that the central bank (BSP) will …
4th January 2019
The advanced estimate of Singapore’s GDP should be treated with caution, but it appears that weak global demand weighed heavily on growth in Q4, a trend we expect to continue this year. … Singapore GDP (Q4 …
2nd January 2019
While December PMIs for Emerging Asia bounced back a little in some economies, they still indicate that the region’s manufacturing sectors lost momentum over the course of Q4. Meanwhile, timely export data from Korea do not bode well for the region’s …
The Awami League led by Prime Minister Hasina is widely expected to win the general election on 30 th December. Low wages and a rapidly growing workforce mean Bangladesh should continue to pick up low-end manufacturing from China. But if Bangladesh is to …
21st December 2018
Taiwan’s central bank (CBC) today left its policy rate on hold at 1.375% and gave little indication in its accompanying statement that it is in any hurry to adjust its policy setting anytime soon. We think interest rates will be left unchanged throughout …
20th December 2018
Today’s decision by Bank Indonesia (BI) to leave interest rates unchanged at 6.0% is unlikely to mark the end of the tightening cycle given the likelihood of further falls in the rupiah over the coming year. … Bank Indonesia set to raise interest rates …
We expect Emerging Asia to grow at its weakest rate in 2019 since the 2008-09 global financial crisis. With inflation also set to drop back, the regional tightening cycle is likely to come to an end. We expect a few countries to start cutting rates by the …
19th December 2018
Today’s rate hike by the Bank of Thailand (BoT) is unlikely to mark the start of a prolonged tightening cycle. In fact, with growth likely to slow in 2019 and inflation set to remain very weak, we think today’s hike could be a case of “one and done”. In …
One of the key risks to the Philippines over the coming year is a further widening of the current account deficit. Data released earlier in the week showed the deficit widened to 3.0% of GDP in the four quarters to Q3 – the most on record. With weak …
18th December 2018
GDP growth in Sri Lanka slowed in Q3, but this has already been overshadowed by the de-escalation of the political crisis. With further fiscal tightening on the horizon, growth is likely to remain subdued, but the risk that unrest triggers a slump in …
The Bank of Thailand (BoT) is likely to raise its policy rate for the first time since 2011 at its meeting on Wednesday due to concerns about accelerating credit growth. Meanwhile, having widened to a record US$4.2bn in October, we think the trade deficit …
14th December 2018
The central bank in the Philippines (BSP) left interest rates unchanged today, but with inflation set to fall back sharply over the coming months and policymakers sounding increasingly dovish on the outlook for inflation, the BSP is likely to cut rates …
13th December 2018
With the political crisis in Sri Lanka showing no sign of coming to an end, we are changing our GDP growth and interest rate forecasts for next year. … Sri Lanka political crisis: growth to slow, rates to …
12th December 2018
A surge in lending to the property sector and booming prices in the capital, Seoul, are unlikely to cause serious problems for Korea’s economy. … Are risks brewing in Korea’s housing …
Even if a general election that has now been confirmed for 24th February passes smoothly, political uncertainty is likely to remain a drag on Thailand’s prospects. … Thailand: election will not improve long-run …
11th December 2018
The cease fire struck almost a week ago between China and the US has lifted hopes that a damaging trade war between the two countries will be averted. But even if the truce beaks down, we don’t think the impact on the region will be too great. We believe …
7th December 2018
The collapse in the rupee and an aggressive tightening of monetary policy is leading to a welcome fall in Pakistan’s external imbalances. However, with most of the adjustment taking place through a collapse in imports rather than a pickup in exports, the …
5th December 2018
Consumer price inflation in the Philippines fell in November, and looks set to decline further over the coming months due to a combination of lower food and oil prices. If inflation falls back as we anticipate, then the central bank is unlikely to raise …
The November PMIs for Emerging Asia indicate that the region’s manufacturing sectors lost further momentum in the middle of Q4. Meanwhile, the weakness in new export orders supports our view that the recent resilience in Asian exports is unlikely to last. …
3rd December 2018
The hawkish minutes from the Bank of Thailand’s (BoT) November meeting reaffirm our view that the central bank will raise rates by 25bp at its December meeting. Meanwhile, the Korean government’s failure to agree an exemption from possible US automotive …
30th November 2018
While the Bank of Korea (BoK) hiked its policy rate today for the first time in a year, this is unlikely to mark the start of a tightening cycle. … Korea: rate hikes next year look …
Most countries in the region are net oil importers (Malaysia is the key exception) and should gain from the recent drop in oil prices, with the Philippines likely to be among the biggest beneficiaries. Consumer price inflation in the Philippines reached a …
27th November 2018
A lot of commentary has blamed the slowdown in Asian GDP growth in the third quarter on the trade war between the US and China. We think these claims are misguided. The most obvious explanation for the downturn in Asian growth last quarter is a slowdown …
23rd November 2018
By seeking closer ties and increased investment from China, President Duterte of the Philippines risks repeating the mistakes made by other countries in the region. With the current account deficit already approaching unsustainable levels and given the …
22nd November 2018
The revised estimate of Singapore’s Q3 GDP showed that the economy cooled off in Q3, and with external demand set to weaken and interest rates rising, growth is likely to stay weak over the next couple of years. … Singapore GDP (Q3 …
Growth slowed significantly in Emerging Asia last year, and is likely to remain fairly subdued over the coming year, with looser fiscal policy unlikely to offset the drag from weaker global demand and tighter monetary policy. … What next for Asian …
21st November 2018
GDP growth in Thailand slowed sharply in Q3, and is likely to struggle for momentum in the quarters ahead due to a combination of weaker external demand and a faltering tourism sector. … Thailand GDP …
19th November 2018
Recent dovish comments from the Deputy Governor of the central bank of the Philippines (BSP), Diwa Guinigundo, which mention falling inflation expectations and the BSP having the “the flexibility to digest the recent rate hikes” support our view that the …
16th November 2018
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 …
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
