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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% …
Vietnam’s decision to cut interest rates today risks fuelling a further surge in credit growth, increasing the risk of a sharp rise in non-performing loans further down the line. We think the rate cut will have to be reversed over the coming years. … …
7th July 2017
The “devaluation” of the Pakistani rupee earlier in the week is a reminder of the country’s precarious balance of payments position. Pakistan will soon be forced to either let the currency fall much further, tighten monetary policy aggressively, or make …
A pick-up in exports will lift growth in Emerging Asia to a five-year high in 2017, but mounting domestic headwinds means that this is unlikely to be sustained. We expect growth to slow in 201819. Having peaked at the start of the year, inflation has …
6th July 2017
A pick-up in exports should help lift growth in Emerging Asia (excluding China and India) to a seven-year high this year, but mounting domestic headwinds mean growth is likely to slow in 2018. … Domestic problems start to …
5th July 2017
The June PMIs for Emerging Asia suggest that the region’s manufacturing sectors remained in decent health. The pick up in the PMI readings in Taiwan and Korea – the two economies where the PMIs most closely track the hard data – is particularly …
3rd July 2017
There are more differences than similarities between the situation now and the position many Asian countries found themselves in on the eve of the Asian financial crisis 20 years ago. But there is no room for complacency. For many countries in Emerging …
30th June 2017
Asian equity markets have continued to rally, with stock markets in Taiwan, Korea, India and Indonesia all recently hitting new record highs. … Asian equities continue to …
29th June 2017
Vietnam’s economy is regaining momentum, helped by a recovery in the agriculture sector. Looking ahead, with exports likely to remain strong and private sector credit still expanding at a rapid clip, the economy should continue to recover throughout the …
One year since coming to power, President Duterte of the Philippines has not been the disaster for the economy that some feared. His wisest move has been to hand over responsibility for economic management to his respected finance minister, Carlos …
23rd June 2017
Sri Lanka’s central bank left interest rates on hold today, and the less hawkish tone of the statement suggests the central bank’s tightening cycle may be nearing an end. We are changing our forecast for this year, and now expect policy rates to rise by …
With the economy experiencing a steady recovery and inflationary pressures still very subdued, it was no surprise that Taiwan’s central bank (CBC) decided to keep its policy rate on hold today at 1.375%. The dovish tone of the CBC’s accompanying statement …
22nd June 2017
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. But while the consensus among analysts is that the BSP will hike rates twice this year, we continue to think that rates will be …
The recent acceleration in credit growth in the Philippines is unlikely to lead the central bank (BSP) to hike interest rates at its meeting on Thursday. However, it could prompt the BSP to introduce more measures to clamp down on lending to the property …
16th June 2017
Despite the poor growth outlook, Bank Indonesia left its policy rate on hold today at 4.75%. With inflation set to remain elevated over the coming months, the central bank is likely to be in little hurry to cut interest rates any further. … Inflation and …
15th June 2017
GDP growth in Sri Lanka slowed last quarter according to the official figures, and is likely to remain weak throughout 2017 as fiscal and monetary policy are tightened. … Sri Lanka GDP …
