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The Monetary Authority of Singapore (MAS) today left its monetary policy settings unchanged. The accompanying statement gives the MAS room to tighten policy if necessary, but given the subdued outlook for inflation we don’t think this will happen any time …
13th October 2017
The poor prospects for domestic demand across large parts of Emerging Asia mean that regional growth is likely to slow over the next couple of years. However, provided exports continue to grow at a decent pace, the slowdown should be gradual. With growth …
11th October 2017
Given the subdued outlook for inflation, we think the Monetary Authority of Singapore (MAS) will leave its policy settings unchanged not just at next week’s meeting, but throughout 2018 as well. In contrast, a growing number of analysts expect monetary …
6th October 2017
Emerging Asia’s PMIs for September suggest the region’s manufacturing sectors ended Q3 on a solid note. Focussing on the two economies where the PMIs most closely track the hard data, Taiwan’s manufacturing sector remains in good health, while Korea’s …
2nd October 2017
Asian equities and currencies have generally fallen over the past month. Although worries about the Fed have played a role, local factors have been important too. … Asian equities and currencies come off the …
29th September 2017
Whereas the consensus is expecting monetary policy in Emerging Asia to be tightened next year, we think central banks will be in little hurry to raise interest rates. One of the main reasons is the subdued outlook for inflation, which is likely to remain …
Vietnam’s economy recorded another quarter of strong growth in the third quarter of the year, helped mainly by a pick-up in the manufacturing sector and solid export growth. Although we expect growth to remain decent over the coming quarters helped by a …
The Bank of Thailand (BoT) today resisted pressure from the government to loosen monetary policy, and instead left its key interest rate unchanged at 1.50%. With headwinds to the economy mounting and inflationary pressures subdued, we think interest rates …
27th September 2017
Given the economy’s poor growth prospects and the subdued outlook for inflation, today’s rate cut by Bank Indonesia (BI) is unlikely to be the last in the current cycle. However, as the central bank hinted at in today’s statement, further rate cuts are …
22nd September 2017
The government is putting pressure on the Bank of Thailand (BoT) to cut interest rates in order to weaken the baht, which has been the best performing currency in Asia so far this year. The central bank guards its independence very closely, and with …
With economic growth fairly strong and inflationary pressures subdued, Taiwan’s central bank (CBC) decided to keep its policy rate on hold today at 1.375%. The dovish tone of the Bank’s accompanying statement reaffirms our view that rates will remain …
21st September 2017
Despite the recent rebound in inflation, it was no surprise that the Philippines central bank (BSP) kept its policy rate unchanged at 3.0% today. There was nothing in its statement to suggest BSP is in any rush to change its stance – we expect it to leave …
The next stage of monetary policy normalisation in the developed world – balance sheet reduction by the US Fed, and the shift towards QE tapering in the euro-zone – will not have a major impact on Emerging Asia. Instead, domestic factors will determine …
15th September 2017
GDP growth in Sri Lanka accelerated slightly last quarter, but the big picture is that growth remains weak by past standards. Looking ahead, with tight fiscal and monetary policy set to continue weighing on growth over the coming quarters, we see little …
The United Nations has agreed a new set of sanctions on North Korea, which while falling short of what was originally demanded by the US, constitute the strongest sanctions ever imposed on the country. The measures include a complete embargo on textile …
12th September 2017
Exports from Emerging Asia have rebounded strongly over the past year. Despite the protectionist threat from the US, exports should continue to expand at a decent pace. This in turn, should provide an important support to economic growth across the …
8th September 2017
With growth strong and inflation moderating, it came as no surprise that Malaysia’s central bank (BNM) kept its policy rate unchanged at 3.0% today. In its statement, BNM stressed the positive outlook for the economy but gave no indication that it was …
7th September 2017
Chinese retaliation over South Korea’s deployment of the US Terminal High Altitude Defense (THAAD) system has led to a sharp slump in Chinese tourist arrivals in South Korea and a big fall in Korean automotive exports to China, both of which weighed …
6th September 2017
Subdued inflation and a relatively low level of foreign currency debt mean the weakness of the Philippine peso, which has recently been hitting multi-year lows against the US dollar, is not a major threat to the economy. In fact, policymakers appear to be …
1st September 2017
Emerging Asia’s PMIs for August suggest the region’s manufacturing sectors gained a little bit of momentum last month. In particular, there were signs of improvement in both Korea and Taiwan – the two economies where the PMIs most closely track the hard …
The Bank of Korea (BoK) today left interest rates unchanged and there was little sign in the central bank’s statement that the central bank is in any rush to adjust policy. With the economy growing at a decent pace but price pressures under control, …
31st August 2017
Equity markets in Emerging Asia have continued to take the crisis in North Korea in their stride. Although most markets have fallen in response to today’s missile test, the moves are very small. It is notable that the South Korean Kospi has actually …
29th August 2017
Economic growth held up well across most of Emerging Asia last quarter. Poor prospects for domestic demand mean growth has probably already peaked in many countries, but with exports likely to remain buoyant, most of Asia should continue to grow at a …
25th August 2017
Despite the current subdued rates of inflation across most of Emerging Asia, we don’t expect many of the region’s central banks to copy Bank Indonesia, which yesterday surprised markets by cutting interest rates. The main reason why other central banks …
23rd August 2017
Given the improving outlook for inflation in Indonesia, we think today’s 25 basis point cut in the main policy rate is unlikely to be the last in the current cycle. We expect one further rate cut this year, although the timing and pace of further cuts …
22nd August 2017
Figures released today show Thailand’s economy continued to gain momentum in Q2, and is now growing at its fastest pace in y/y terms since Q1 2013. We expect growth to remain relatively strong over the next couple of quarters, helped by strong external …
21st August 2017
A fall in remittances to Bangladesh, Pakistan and Sri Lanka is a big concern for these economies. If sustained, it could cause growth to weaken and put their currencies under downward pressure. … Remittance slowdown a big risk to South …
18th August 2017
Figures released today show that GDP growth in Malyasia unexpectedly accelerated in Q2. However, we expect growth to ease from around 5.5% this year to 4.5% in 2018 as domestic problems continue to mount. … Malaysia GDP …
The Philippines recorded another quarter of solid growth in Q2 and should continue to perform well over the near term, supported by rapid government spending growth and healthy private consumption. … Philippines GDP …
17th August 2017
The Bank of Thailand (BoT) left interest rates on hold today and the accompanying monetary policy statement suggests the central bank is in no rush to adjust rates any time soon. We are maintaining our view that the BoT will keep interest rates unchanged …
16th August 2017
Financial markets in Korea and the rest of Emerging Asia have fallen in response to the latest increase in tensions on the Korean peninsula. However, given the scale of the risks involved, the falls have been surprisingly small. Provided full-scale war is …
11th August 2017
Today’s revised estimate of Singapore’s second quarter GDP suggests the economy is in better shape shape than previously thought. Looking ahead, although rising interest rates will remain a drag on demand, the healthy outlook for exports means growth …
Today’s decision by the central bank in the Philippines (BSP) to keep its main policy rate on hold at 3.0% was widely expected. The accompanying statement, which was the first to be published since Nestor Espinalla took over as governor, suggests the …
10th August 2017
Indonesia’s run of remarkably steady GDP growth continued in Q2, with the economy growing by 5.0% y/y, unchanged from the 5.0% expansion recorded in Q1. Looking ahead, with commodity prices likely to stay depressed and the government struggling to make …
7th August 2017
Since becoming president of South Korea in May, Moon Jae-in has introduced a range of measures aimed at reducing inequality and cutting youth unemployment. Moon’s policies are likely to boost growth in the short-term, but there is a risk they could drag …
4th August 2017
Sri Lanka’s central bank left interest rates on hold today, and the less hawkish tone of the statement suggests that its tightening cycle may now be at an end. We now expect rates to be left on hold for the remainder of the year, having previously …
3rd August 2017
Emerging Asia’s PMIs for July suggest the region’s manufacturing sectors started Q3 on a subdued note. Focussing on the two economies where the PMIs most closely track the hard data, Taiwan’s manufacturing sector appears to be holding up well, while …
1st August 2017
Equity markets in Asia continued their rise in July. Meanwhile, currencies in the region generally strengthened against the US dollar … Asian equities rapid rise …
31st July 2017
As ASEAN approaches its 50th anniversary, we see little prospect of it transforming itself into the kind of single market and production base which its supporters hope will one day enable it to rival China. Despite this, economic prospects for large parts …
There is growing speculation that Malaysia’s prime minister, Najib Razak, will take advantage of the recent strength of the economy by calling an early general election. The weak state of the opposition means another victory for the ruling UMNO party is …
28th July 2017
The resignation of Pakistan’s prime minister, Nawaz Sharif following the decision by the country’s Supreme Court to disqualify him from office, has once again put the spotlight on the country’s highly unstable political situation. However, this is far …
Taiwan’s economy slowed in Q2 but with global demand set to remain healthy and policy supportive, we expect growth to rebound in the second half of the year. … Taiwan GDP (Q2 …
Korea’s economy slowed a touch in Q2, but remained in decent shape. Looking ahead, we expect growth to remain fairly strong over the next year or so, helped by buoyant global demand and strong government spending growth. … Korea GDP (Q2 …
27th July 2017
The Taiwan government’s Infrastructure Development Programme should not only provide a boost to near-term growth at a time when the economy is slowing, but should also improve prospects over the longer term. … Taiwan infrastructure projects to boost …
21st July 2017
After a marathon policy meeting today, Bank Indonesia confirmed that it was keeping its policy rates unchanged. Quite why the decision took so long is unclear – the decision was exactly what everyone had expected. A senior BI official has characterised …
20th July 2017
The announcement over the weekend that South Korea will be increasing its minimum wage by 16% next year represents a victory for President Moon Jae-in, who was elected on a pledge to boost incomes and reduce inequality. Korea’s minimum wage is set every …
17th July 2017
The announcement earlier in the week from the US government that it is formally seeking to renegotiate the Korea-US free trade pact (KORUS) is not a big threat to the Korean economy. The negotiations are most likely to focus on eliminating non-tariff …
14th July 2017
Today’s advanced estimate of Singapore’s second quarter GDP suggests the economy strengthened in Q2. Further ahead, although strong global demand means growth should remain relatively strong, rising interest rates will act as a drag on domestic demand. … …
With inflation falling and growth rebounding, it was no surprise that Malaysia’s central bank (BNM) kept its policy rate unchanged at 3.0% today. Looking ahead, we expect that BNM will keep interest rates on hold until at least the end of the year. … …
13th July 2017
The Bank of Korea (BoK) left interest rates on hold today and there was little indication in the governor’s accompanying press conference that the central bank is in any hurry to adjust policy. We continue to expect the policy rate to be kept at 1.25% …
