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Given the hawkish tone of the central bank’s statement, a further rate increase in the Philippines now looks likely. We originally thought today’s hike would mark the end of the tightening cycle. But with inflation close to peaking, we are only pencilling …
20th June 2018
The Bank of Thailand (BoT) left its policy rate on hold today and the accompanying statement makes clear that monetary policy will remain accommodative for a while longer yet. With inflation benign and external vulnerabilities limited, we think the BoT …
Trade tensions between the US and China have been ratcheted up another notch after US President Donald Trump yesterday threatened to impose a 10% tariff on a further US$200bn of Chinese imports. Taiwan, Malaysia and Singapore are among the countries that …
19th June 2018
Today’s GDP figures show that Sri Lanka’s economy made a weak start to 2018. While growth should pick up over the coming quarters, the recovery is likely to be weak by past standards. … Sri Lanka GDP …
18th June 2018
Thailand’s working age population is forecast to start shrinking from next year, presenting a headwind to the country’s economic prospects. With productivity growth set to remain weak, economic growth is unlikely to average much above 2.5% over the medium …
15th June 2018
Today’s historic summit between Donald Trump and Kim Jong Un represents an extraordinary turn of events, and comes just a year after it appeared North Korea could be heading for a devastating war with the US. In this Update , we answer five key questions …
12th June 2018
The latest devaluation in the Pakistani rupee has once again put the spotlight on the country’s precarious external position. The government will hope to keep the situation under control until next month’s general election is out of the way, but Pakistan …
11th June 2018
Tomorrow’s historic summit between Donald Trump and Kim Jong Un in Singapore has raised the (distant) prospect of international sanctions against North Korea being lifted, a move that one day could even pave the way for the country’s integration into the …
Next week’s summit between Donald Trump and North Korean leader, Kim Jung Un, is a big deal politically, but even if a major breakthrough is announced, the impact on South Korea’s financial markets and economy is likely to be fairly modest. … How will the …
8th June 2018
The resignation of Malaysia’s central bank governor amid accusations of corruption at the Bank is an encouraging sign that the new government’s anti-corruption drive is gathering pace. The new governor, who has not yet been announced, will take over …
6th June 2018
Having nudged higher again in May, inflation in the Philippines probably has a little further to rise. But with food and energy price pressures set to ease over the coming months and the impact of indirect tax hikes set to drop out of the y/y comparison …
5th June 2018
GDP growth across Emerging Asia edged up slightly in the first quarter of the year, and should continue to hold up relatively well in the near term, despite the drag from higher oil prices and weaker export demand. … What next for …
1st June 2018
Most of Emerging Asia’s PMIs picked up in May. However, the manufacturing sector in Taiwan, one of the economies where the PMIs most closely track the hard data, appears to be losing momentum. … Manufacturing PMIs …
Emerging Asia has not been spared in the recent EM sell-off, but its financial markets have held up better than those in other EM regions. … Asian markets stumble in …
31st May 2018
Bank Indonesia (BI) hiked rates by 25bp today (its second increase in two weeks). We expect further hikes later this year, but we doubt that a repeat of the aggressive tightening cycle seen in 2013 is on the cards. … New Bank Indonesia governor …
30th May 2018
In a massive political upset, the incumbent Barisan Nasional (BN) coalition led by Najib Razak was ousted by a resurgent opposition led by former Prime Minister Mahathir Mohamad in Malaysia’s 14 th general election. The result brought an end to BN’s …
28th May 2018
There is growing speculation that Malaysia’s new prime minister, Mahathir Mohamad, will cancel some of the huge Chinese-backed infrastructure projects approved by his predecessor. Given Malaysia’s weak fiscal position and that some of these projects are …
The recent jump in oil prices will act as a headwind to economic activity across the region, with the drag on growth likely to be biggest in Thailand, Taiwan and Korea. However, with monetary and fiscal policy likely to remain supportive, economic growth …
25th May 2018
The Bank of Korea (BoK) kept its policy rate on hold at 1.50% today, as expected, and there was nothing in the accompanying statement or the governor’s press conference that suggest the BoK will adjust rates any time soon. A rate hike at the BoK’s next …
24th May 2018
The revised estimate of Singapore’s Q1 GDP showed that the economy started 2018 on a better note than previously thought. However, a gradual slowdown in global growth and a tightening of domestic monetary conditions mean the strength of Singapore’s …
Thailand’s economy expanded at its fastest pace in five years in Q1. While we think growth has now peaked, the economy should remain in good health over the coming quarters, helped by supportive fiscal and monetary policies. … Thailand GDP …
21st May 2018
The Philippines, India and Korea are all likely to follow Bank Indonesia by hiking interest rates over the next couple of months. But unlike Indonesia, these three are set to tighten policy from a position of relative strength. In the event that the …
18th May 2018
The performance of the rupiah will continue to determine the near-term outlook for monetary policy in Indonesia. With the currency likely to remain under downward pressure as Treasury yields in the US continue to rise, further rate hikes by Bank Indonesia …
17th May 2018
While today’s figures show that the new government inherits an economy in decent health, the scrapping of the Goods and Services Tax (GST) and campaign pledges to review Chinese investment have made the outlook much more uncertain. For now, we are …
The decision today by the new Malaysian government to effectively abolish the Goods and Service Tax (GST) from the start of next month should provide a fiscal boost to the economy, but it will leave the government with a big hole in its coffers to fill. …
16th May 2018
The Bank of Thailand unsurprisingly decided to keep its policy rate on hold today at 1.5% against a backdrop of solid economic growth and subdued inflationary pressures. There was nothing in the accompanying statement that suggests the BoT is prepared to …
The highlight of Moon Jae-in’s first year as president has been the improvement in relations with North Korea. On the economic front, however, Moon has largely steered clear of the kind of controversial reforms South Korea needs to deal with its dreadful …
11th May 2018
After cutting its lending rate just a month ago, it was no surprise that the central bank of Sri Lanka (CBSL) decided to leave policy on hold today. However, with inflation benign and the economic recovery likely to disappoint, we expect further loosening …
While Malaysia’s central bank (BNM) left interest rates unchanged at today’s scheduled monetary policy meeting, the outlook for monetary policy has been thrown into considerable uncertainty following yesterday’s shock election result. For now we are …
10th May 2018
The Philippines central bank (BSP) today hiked its key policy rate from 3.00% to 3.25%, but also left the door open to further rate increases later this year. While we think interest rates will be raised again in 2018, we doubt the BSP is about to embark …
A pick-up in economic growth in the Philippines in Q1 means that we have raised our forecast for 2018 as a whole from 6.0% to 6.5%. However, this still implies a slowdown in the quarters ahead, as weak export growth, sluggish investment and higher …
Today’s shock victory for former-Prime Minister Mahathir Mohamad in Malaysia’s general election could have far-reaching consequences for the economy. In the near term, there is likely to be a sharp deterioration in the fiscal position, if as expected, …
9th May 2018
Indonesia’s growth eased to 5.1% y/y in Q1, from 5.2%, and we see little prospect of a rebound. With policymakers running out of scope to stimulate the economy further, we expect growth to remain stuck at around 5% over the next couple of years. … …
7th May 2018
A further rise in inflation in April and more hawkish comments from policymakers suggest the central bank of the Philippines (BSP) is likely to raise interest rates at its upcoming meeting on Thursday. However, with the recent rise in inflation likely to …
4th May 2018
The April PMIs for Emerging Asia suggest that the region’s manufacturing sectors were lacklustre at the start of Q2. Focussing on the two economies where the PMIs most closely track the hard data, Taiwan’s manufacturing conditions remained decent, while …
2nd May 2018
Asian currencies have recently lost a bit of ground against the dollar as rising Treasury yields in the US have helped push the greenback higher. Although uncertainty over the outlook for US monetary policy may result in some further volatility in the …
30th April 2018
Despite facing a resurgent opposition, Prime Minister Najib Razak is favourite to win a third term in a general election due on 9 th May. A victory for Najib would probably lead to a short-term fiscal boost for the economy. However, the election will do …
Today’s landmark summit between the two Koreas should help to remove a major tail risk for the region’s markets and economies. However, the impact on South Korea’s economy of an easing in tensions is unlikely to be that significant. … Summit talks and the …
27th April 2018
After hitting a multi-year high in Q4, Taiwan’s GDP growth edged down last quarter. We expect the economy to cool further over the quarters ahead. Domestic demand is likely to hold up fairly well, supported in part by looser fiscal policy, but export …
Earlier this week Bank Indonesia raised the prospect of an interest rate hike to support the rupiah, which has come under further downward pressure as rising Treasury yields in the US have pushed the greenback higher. But given the poor outlook for …
Korea’s economy rebounded strongly in the first quarter of the year and should continue to hold up well in the coming quarters, supported by a turnaround in the tourism sector, robust global demand and supportive fiscal policy. … Korea GDP …
26th April 2018
Malaysia, Indonesia and Pakistan all face crucial elections over the next few months, and in each country, policymaking has recently taken a turn for the worse. In Malaysia and Indonesia we see little prospect of an improvement even after the elections …
20th April 2018
Equity markets across Emerging Asia have bounced back a little since early April as fears of an imminent trade war between the US and China have receded. The decision by the US Treasury not to label any country in the region a currency manipulator, Donald …
17th April 2018
Myanmar’s civilian government has made progress in addressing some of the country’s problems since it came to power two years ago. However, major challenges remain. The Rohingya refugee crisis is showing signs of damaging investor confidence, while much …
13th April 2018
The Monetary Authority of Singapore (MAS) today moved to increase 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 slow in the coming quarters and …
The Bank of Korea (BoK) unsurprisingly kept its policy rate on hold at 1.50% today, and the dovish tone of the governor’s press conference suggests that the BoK is likely to remain on the sidelines for a while. … Korea’s central bank in wait-and-see …
12th April 2018
Despite the growing protectionist threat from the US, a combination of rising automation and the migration of some productive capacity into the cheaper interior mean that China is likely to remain a highly competitive export manufacturing centre for the …
10th April 2018
Against the backdrop of a strong economy and with gerrymandering stacking the odds firmly in his favour, Prime Minister Najib Razak is highly likely to win an election which will now take place by May. While this should provide certainty for investors, it …
6th April 2018
As a small, open economy that releases GDP data much earlier than most other countries, Singapore is often billed as a bellwether for the global economy. In reality, Singapore’s GDP figures are far too volatile to give a reliable indication of how the …
The growing threat of a US-China trade war is the key risk to the outlook. The tariff measures announced so far don’t amount to much, but any escalation in trade tensions that leads to a significant fall in US imports from China would have a sizeable …
5th April 2018
