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The fall in the Pakistani rupee over the past week 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 …
15th December 2017
The Philippines central bank (BSP) left rates unchanged at 3.0% today while also downplaying fears that the economy is overheating. While both financial markets and the consensus are expecting monetary policy to be tightened next year, we continue to …
14th December 2017
Many countries in South and South East Asia invest too little on infrastructure. Fiscal constraints mean the situation is unlikely to change anytime soon, with the result that poor infrastructure is likely to drag on the region’s prospects for some time …
8th December 2017
The programme of tax hikes and spending increases passed today by South Korea’s parliament is unlikely to have much impact on the country’s growth prospects. The budget is forecast to be fiscally neutral, so will not provide much of a boost to short-term …
6th December 2017
Today’s trade figures suggest that Malaysia’s external sector remains in rude health. Both exports and imports continued to grow at a rapid pace. Looking ahead, although export growth is likely to slow next year, they should still continue to grow at a …
The central banks in Asia most likely to follow the Bank of Korea over the coming year in raising interest rates are those of Malaysia, India and Pakistan. However, with the exception of Pakistan, the tightening cycles are likely to be very gradual. … Who …
1st December 2017
The November PMIs for Emerging Asia suggest that the region’s manufacturing sectors rebounded strongly last month. Encouragingly, the headline readings for Taiwan and Korea – the two economies where the PMIs most closely track the hard data – both hit …
The Bank of Korea (BoK) raised its policy rate for the first time since 2011 today. Looking ahead, the tone of the governor’s accompanying press conference suggests aggressive monetary policy tightening is not on the cards, and we expect only one more …
30th November 2017
Strong growth figures, a shift in interest rate expectations and general dollar weakness have propelled Asian currencies higher against the US dollar so far this month. … Asian currencies make further gains against the …
29th November 2017
Concern over the recent strength of the won is unlikely to stop the Bank of Korea (BoK) from hiking interest rates at its meeting on Thursday, but it is likely to prompt the authorities into resuming their intervention in foreign exchange markets to …
27th November 2017
With Q3 GDP figures now published for most of the major economies in Emerging Asia, the region looks to have grown by 4.6% y/y in the third quarter – a full 1.5%-points faster than just 18 months ago. But with exports set to weaken and domestic demand …
24th November 2017
Today’s revised estimate of Singapore’s Q3 GDP confirmed that the economy rebounded strongly last quarter. While growth is likely to slow a little over the coming quarters, the economy should still continue to grow at a decent rate, supported by healthy …
23rd November 2017
Economic growth across Emerging Asia rebounded strongly last quarter, with several countries, including Thailand, Singapore, Malaysia and Korea all growing at their fastest pace in a number of years. With economic growth improving, policymakers have …
21st November 2017
Thailand’s GDP growth picked up to its fastest pace in more than four years in Q3. A combination of robust external demand and increased infrastructure spending should help keep growth robust in the quarters ahead. … Thailand GDP …
20th November 2017
Thailand’s economy has rebounded strongly over the past year, with Q3 GDP figures due to be published on Monday likely to show the country growing at its strongest pace in over four years. The recovery is leading to speculation that the Bank of Thailand …
17th November 2017
Malaysia’s economy expanded at its fastest pace in three years in Q3. While we think growth has now peaked, the economy should continue to grow at a decent pace over the next year, supported by robust exports and investment. … Malaysia GDP …
Today’s decision by Bank Indonesia to leave interest rates unchanged at 4.25% does not mean the easing cycle is over. However, with worries growing about the strength of the rupiah, we think any further easing is likely to be very gradual. We are …
16th November 2017
The Philippines’ economy strengthened further in Q3, with growth coming in at 6.9% y/y. However, we expect the economy to slow next year. Although exports and government spending are likely to remain supportive, private investment looks set to weaken. … …
Almost 10 months after Donald Trump pulled the US out of negotiations to set up the Trans-Pacific Partnership (TPP), ministers from the remaining 11 countries are trying to salvage something from the deal. The concern is that in order to secure an …
10th November 2017
Despite rising inflation, rapid credit growth and a weak currency the Philippines central bank (BSP) kept its policy rate unchanged at 3.0% today. While the consensus is expecting rate hikes next year, we continue to think that BSP will keep rates on hold …
9th November 2017
Malaysia’s central bank left its policy rate unchanged at 3.0% today, but the more hawkish tone of the statement suggests that monetary policy tightening may soon come back onto the agenda. We now expect BNM to hike rates by 25bp, possibly as early as its …
Against a backdrop of robust growth and subdued inflation, today’s decision by the Bank of Thailand (BoT) to leave its key interest rate unchanged at 1.50% came as no surprise. The accompanying monetary policy statement reaffirms our view that the central …
8th November 2017
Sri Lanka’s central bank (CBSL) left rates on hold today, and the accompanying monetary policy statement supports our view that rate changes are not on the horizon. CBSL will be wary of hiking rates at a time when growth is sluggish, but with inflation …
7th November 2017
The gentle acceleration in Indonesia’s GDP growth in the third quarter to 5.1%, from 5.0%, is unlikely to mark the start of a sustained recovery in the economy. Given the mounting headwinds facing the economy, we expect growth to come in at around 5% over …
6th November 2017
Donald Trump’s priority during his upcoming trip to Asia is likely to be drumming up support for his hard-line stance in dealing with North Korea. But while this means he is likely to go soft on his protectionist threats in the short term, it is too soon …
3rd November 2017
China and South Korea’s decision to “reset” relations should provide a significant boost to Korea’s economy by bringing an end to China’s boycott of Korean goods as well as the clampdown on Chinese visitors to Korea. In response, we are raising our 2018 …
1st November 2017
The October PMIs for Emerging Asia suggest that the region’s manufacturing sectors lost some momentum at the start of Q4. The headline readings for Korea and Taiwan – the two economies where the PMIs most closely track the hard data – edged down, but we …
Equity markets in Asia rebounded strongly in October, with bourses in Korea, India, Taiwan, Thailand, the Philippines and Indonesia all reaching new record highs. … Asian equities bounce …
31st October 2017
GDP growth in Taiwan rose in Q3 to the fastest pace in more than two years as a jump in exports outweighed a slowdown in the domestic economy. Looking ahead, with global demand set to remain healthy and infrastructure spending likely to accelerate, we …
The Philippines should remain one of the region’s fastest growing economies over the coming years. But with signs that the worsening political climate is starting to discourage investment, economic growth is likely to be weaker than most expect. … …
27th October 2017
While Malaysia has made good progress in bringing down its budget deficit, there remains limited room for a pre-election giveaway in the 2018 budget, which is due to be announced on 27th October. Given that Prime Minister Najib Razak must hold an election …
26th October 2017
GDP growth in South Korea rose to a seven-year high in q/q terms last quarter as the economy brushed off the rising tensions on the Korean peninsula. Provided conflict is avoided, South Korea should continue to grow strongly over the coming year, helped …
Joko Widodo (commonly known as Jokowi) came to power three years ago promising to reinvigorate the struggling economy and raise growth to 7%. Despite some encouraging progress at the start of his presidency in pushing through important reforms, Jokowi has …
20th October 2017
Today’s decision by Bank Indonesia to leave interest rates unchanged at 4.25% probably represents a pause in the central bank’s easing cycle, rather than a halt. We continue to think that with inflationary pressures under control and the economy …
19th October 2017
The Bank of Korea (BoK) left interest rates on hold today and the governor’s accompanying press conference makes clear that monetary policy will remain accommodative. We continue to expect the policy rate to be kept at 1.25% not just for the rest of this …
For most countries, our forecasts are a little bit below those of both the consensus and the IMF. However, there are three economies, Hong Kong, the Philippines and Pakistan where we think other forecasters are being much too optimistic for next year, and …
13th October 2017
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 …
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 …
