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The central bank of Sri Lanka (CBSL) today cut its lending rate by 25bp. While further monetary policy loosening looks likely against a backdrop of weak growth and easing inflation, aggressive rate cuts are not on the cards. … Sri Lanka cuts rates, …
4th April 2018
Emerging Asia’s PMIs for March suggest the region’s manufacturing sectors ended last quarter on a softer note. Focussing on the two economies where the PMIs most closely track the hard data, Taiwan’s manufacturing sector remains in good health, while …
2nd April 2018
Fears of a trade war between the US and China have weighed on Asian equities over the past month. In contrast, currency markets have been largely unaffected. … Asian equities down on protectionist …
29th March 2018
The very strong performance of Vietnam’s economy in the first quarter of the year raises further doubts about the reliability of the country’s economic statistics. … Vietnam GDP …
The US Treasury is due to report next month which of its major trading partners, if any, have been manipulating their currencies for unfair advantage. Currently, Thailand is the only country in Emerging Asia that meets all three of the criteria laid down …
With the economy in good shape and inflationary pressures subdued, the Bank of Thailand unsurprisingly decided to keep its policy rate on hold today at 1.5%. The accompany statement reiterated that monetary policy will remain accommodative and we are …
28th March 2018
Korea looks to have emerged from the Korea-US free trade agreement (KORUS) re-negotiations unscathed, but rising trade tensions between the US and China remain a threat to its export sector. The future of KORUS had looked uncertain ever since Donald …
26th March 2018
Donald Trump’s plans for a 25% tariff on up to $60bn of Chinese imports are unlikely to have much impact on the rest of Asia. However, as the market reaction today highlights, the threat of a further escalation of the US-China trade conflict is growing. …
23rd March 2018
Bank Indonesia (BI) left interest rates unchanged today, while also appearing to rule out further interest rate cuts. But with growth set to underperform and inflationary pressures under control, we are maintaining our view that rates will be cut later …
22nd March 2018
Taiwan’s central bank (CBC) decided to keep its policy rate on hold today at 1.375% against a backdrop of decent economic growth and subdued inflationary pressures. The familiar and dovish tone of the CBC’s accompanying statement reaffirms our view that …
The Philippines central bank (BSP) decision to leave rates on hold today, despite this year’s jump in inflation, adds weight to our view that policy will remain on hold throughout 2018. This stands in contrast to the consensus, which is expecting at least …
The latest fall in the Pakistani rupee has once again put the spotlight on the country’s precarious balance of payments position. Pakistan will soon be forced to either let the currency weaken much further, tighten monetary policy aggressively, or make …
20th March 2018
Central banks across Emerging Asia typically do a poor job at flagging up their decisions in advance, which often leads to investors being wrong-footed. Since the start of 2010, under half of interest rate changes (either hikes or cuts) in Emerging Asia …
16th March 2018
Data released today showed that Sri Lanka’s economy grew at is slowest pace in 16 years in 2017. Growth should rebound in 2018 but is likely to remain weak by past standards. … Sri Lanka GDP …
15th March 2018
Less than a week after the official launch of the 11-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) at a ceremony in Chile, other countries are already queuing up to join. Within Asia, Taiwan, Thailand, Korea, the …
14th March 2018
The near-term outlook for Korea’s export sector remains positive, but US protectionism and Chinese competition pose growing threats to the sector. … Growing threats to Korea’s export …
12th March 2018
Donald Trump’s decision to accept an invitation to visit North Korean leader, Kim Jong-un, represents an extraordinary turn of events, and comes just a few months after the US president was calling his North Korean counterpart “little rocket man” and …
9th March 2018
Developments in the past couple of weeks point to the risk of trade policy in the US becoming much more protectionist. Given its huge bilateral trade surplus with the US, China is likely to be the main target of any trade war. But other countries in the …
Malaysia’s central bank (BNM) kept its policy rate on hold at 3.25% today following a hike at its last meeting in January. With inflation slowing, growth likely to cool further and the currency strong, we doubt that BNM will tighten again this year. … …
7th March 2018
Despite inflation rising to its highest rate in nearly four years in February, the central bank seems in little hurry to tighten monetary policy. We continue to believe that interest rates in the Philippines will remain on hold at least until the end of …
6th March 2018
The imposition of US tariffs on steel and aluminium would have little direct impact on Asian economies. The bigger risk is that they represent the latest steps towards a damaging trade war. … Direct impact of US steel tariffs is …
2nd March 2018
GDP growth across Emerging Asia edged down in the final quarter of last year and is likely to ease further over the coming year. While in most cases the slowdown should be relatively gradual, Hong Kong (where higher interest rates could trigger a sharp …
The February PMIs for Emerging Asia suggest the region’s manufacturing sectors remained in decent health. While the surveys point to rising prices, the big picture is that inflation in most of these economies is unlikely to become a major concern, …
1st March 2018
Asian equities have recovered much of their losses over the second half of this month but a sustained rebound is unlikely. We expect most stock markets to only edge higher over the rest of the year. … Are the good times over for Asian …
28th February 2018
The Bank of Korea (BoK) today unsurprisingly kept its policy rate on hold at 1.50% for its second straight meeting, and the accompanying statement and governor’s press conference suggest the central bank will proceed cautiously with policy tightening. We …
27th February 2018
A low level of foreign currency debt in the Philippines means the recent weakness of the peso is not a major concern. In fact, despite the current worries about rising inflation, policymakers appear to be welcoming the boost to competitiveness the weak …
23rd February 2018
With most countries in the region now having reported GDP figures for Q4, we estimate that aggregate growth in Emerging Asia (excluding China and India) came in at 4.4% y/y last quarter. While this was slower than the 4.7% recorded in the third quarter, …
22nd February 2018
Thailand’s economy lost some momentum in Q4 but still expanded at the fastest pace since 2012 last year. We expect growth to remain robust over the coming quarters, supported by accommodative fiscal and monetary policies. … Thailand GDP …
19th February 2018
Sri Lanka’s central bank (CBSL) left rates on hold today but, in contrast to the consensus, we think that rate cuts will come onto the agenda soon. … Sri Lanka: rates cuts not far …
15th February 2018
Singapore’s government looks likely to raise taxes in its Budget next week to help fund the costs of its rapidly ageing population. But the country’s strong fiscal position leaves it much better positioned to deal with rising healthcare and social …
14th February 2018
The Bank of Thailand’s (BoT) decision to leave interest rates unchanged at 1.50% today was no surprise given the backdrop of an improving economy but very weak price pressures. There was nothing in the accompanying statement that suggests the BoT is …
Malaysia’s economy slowed in Q4 after expanding at its fastest pace in more than three years in Q3. We expect the economy to lose a little more steam over the coming quarters against a backdrop of moderating export growth and tighter monetary conditions. …
The revised estimate of Singapore’s Q4 GDP confirmed that the economy cooled at the end of 2017. Less supportive monetary conditions and fiscal policy suggest growth is likely to slow further over the coming quarters. … Singapore GDP (Q4 …
The manufacturing industry in the Philippines has been a key driver of economic growth in recent years. Although the sector should continue to grow strongly in the near term, the medium-term outlook is becoming more challenging. … Philippines: Will …
9th February 2018
Despite January’s jump in inflation, the Philippines central bank (BSP) left rates on hold at its first meeting of the year. While most analysts think that BSP will be forced to tighten policy this year, we continue to think that it will leave rates on …
8th February 2018
Indonesia’s growth picked up slightly in the fourth quarter to 5.2%, from 5.1%, but we doubt the recovery has further to run. While the consensus is expecting growth to accelerate gradually over the next couple of years, we think the economy will grow at …
5th February 2018
Credit growth has continued to slow in some of the countries, namely Thailand and Malaysia, we had previously identified as being at risk from a rapid build-up of private sector debt. However, risks are continuing to build in other parts of the region, …
2nd February 2018
Emerging Asia’s PMIs for January suggest the region’s manufacturing sectors gained momentum at the start of 2018. Encouragingly, the headline readings for Taiwan and Korea – the two economies where the PMIs most closely track the hard data – both …
1st February 2018
Asian equities and currencies have had a strong start to 2018, but we doubt that their recent performance will be sustained. … Equities and currencies make strong start to …
31st January 2018
Taiwan’s GDP growth rose in Q4 to the fastest in nearly three years. We think the economy will cool over the quarters ahead. On the plus side, domestic demand is likely to hold up well supported by loose fiscal policy. But export growth – a key prop to …
Malaysia and Pakistan have both hiked interest rates over the past week, and while the consensus and financial markets are expecting most other central banks in the region to tighten policy in 2018, we think rates in the majority of countries will either …
30th January 2018
The recent jump in oil prices does not alter the outlook for Asia’s economies. But if prices were to rise significantly further, we would be most concerned about the impact on India and Sri Lanka. … What do high oil prices mean for …
29th January 2018
The Thai authorities are becoming increasingly concerned by the strength of the baht, which has been one of the best performing emerging market currencies over the past year. The most likely policy response is further currency intervention as well as some …
26th January 2018
Malaysia’s central bank (BNM) raised its key policy rate by 25bps to 3.25% today, but with growth set to slow, inflation benign and the currency continuing to strengthen, we suspect this will be a case of one and done. … Malaysia: more rate hikes …
25th January 2018
While Korea’s economy cooled at the end of 2017, we expect growth to regain some momentum in the coming quarters, supported by a turnaround in the tourism sector. … Korea GDP …
The agreement to press ahead with the revised Trans-Pacific Partnership is important in a number of ways. Not only should it provide a decent boost to growth prospects across parts of Asia, but it also shows that despite the shift towards protectionism in …
24th January 2018
US tariffs on imports of solar cells and washing machines are likely to cause some short-term disruption in parts of the region, most notably Malaysia, Korea and Vietnam. However, the overall impact on the region’s growth prospects will be very small. … …
23rd January 2018
The Philippines’ economy cooled off a bit in Q4, with growth easing to 6.6% y/y. We expect the economy will slow further this year, weighed upon by moderating export growth and sluggish investment. … Philippines GDP …
Rapid economic growth, surging imports and strong credit growth have fuelled fears that the Philippines is overheating and that the central bank will soon be forced to hike interest rates to bring the economy under control. We think such fears are …
22nd January 2018
The 2018 Winter Olympics, which get under way in South Korea next month, will not provide much of a boost to the country’s economy. But this will not stop South Korea from recording another year of strong growth. … Korea set for strong 2018, but not …
19th January 2018
