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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
The Philippines looks to be on the verge of passing legislation to allow in more rice imports. If the bill passes, it should lead to a sharp drop in inflation and would reduce the pressure for further aggressive interest rate hikes. Meanwhile, the …
31st August 2018
The Bank of Korea’s (BoK) decision to leave interest rates on hold at 1.50% today came as no great surprise given the recent deterioration in the labour market. Looking ahead, with headwinds to growth mounting and inflationary pressures likely to remain …
Asian currencies have continued to hold up pretty well over the past few weeks despite the turmoil in EM currency markets. Since the start of August, the Korean won and the Thai baht have actually appreciated against the US dollar, while the Indian rupee …
30th August 2018
Stronger-than-expected Q2 GDP figures this week and the Bank of Thailand’s (BoT) increasingly hawkish rhetoric suggest a 25bp rate hike is likely at its next meeting on 19 th September. However, with inflation likely to remain benign and growth set to …
24th August 2018
Growth only slowed a touch in Emerging Asia last quarter, but weakening export demand and tighter monetary policy mean that the region’s economies are likely to cool further over the next year or so. … Further slowdown …
23rd August 2018
Household debt in Korea has surged in recent years, raising fears of a messy unwinding. But while a financial crisis is unlikely to materialise, the debt overhang will act as a constraint on growth. A slowdown in private consumption looms. … Korea’s …
21st August 2018
GDP growth in Thailand cooled slightly in Q2, after expanding at its fastest pace in five years in Q1. We expect growth to slow gradually over the coming quarters, due mainly to weaker export demand. … Thailand GDP …
20th August 2018
Indonesia’s budget for next year envisages a big increase in cash handouts, and is clearly aimed at boosting support for the president ahead of next year’s general election. Worryingly, however, the government is targeting a sharp slowdown in …
17th August 2018
The authorities in Indonesia have redoubled their efforts to support the rupiah over the past week amid further downward pressure on EM currencies caused by the crisis in Turkey. Meanwhile, labour market data for South Korea show job growth fell sharply …
Today’s figures show that Malaysia’s growth slowed sharply in Q2, partly reflecting the political transition following the May election. While consumer spending should continue to be buoyed by the scrapping of the Goods and Services Tax (GST), the …
Following his shock election victory at the start of May, 93-year-old Prime Minister Mahathir Mohamad has wasted no time in carrying out his main campaign promises. With his first 100 days in office now almost up, Mahathir has already scrapped an …
16th August 2018
Today’s rate hike by Bank Indonesia (BI) comes against a backdrop of continued weak economic growth and subdued inflation, and demonstrates that BI’s main focus remains supporting the currency. With the rupiah likely to remain under downward pressure over …
15th August 2018
There is a good chance that the recent volatility in financial markets triggered by the crisis in Turkey will prompt Bank Indonesia into hiking interest rates at its meeting on Wednesday. For most countries, however, the sharp falls in financial markets …
13th August 2018
The revised estimate of Singapore’s Q2 GDP confirmed that the economy lost some steam in the second quarter. With global growth set to cool and local interest rates rising, Singapore’s growth is set to slow in the next couple of years. … Singapore GDP (Q2 …
Joko Widodo (also known as Jokowi) confirmed earlier this week that he will be seeking a second term as president, setting the stage for a repeat of the 2014 election, which saw him narrowly edge past Prabowo Subianto, who leads Indonesia’s main …
10th August 2018
The central bank in the Philippines (BSP) today increased its policy rate for the third meeting in a row, and left the door open to further rate hikes. We think at least one further increase in rates is likely, but with inflation likely to start falling …
9th August 2018
