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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 …
28th May 2018
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
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
