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Confirmation that the US is seeking to renegotiate but not scrap the Korea-US free trade agreement (KORUS) is the latest sign that President Trump’s bark, at least when it comes to trade, is turning out to be worse than his bite. On the campaign trail, …
19th April 2017
The highlight of the coming week is a scheduled monetary policy meeting in Indonesia. Despite the poor growth outlook, we think interest rates will be left on hold against a backdrop of rising inflationary pressures and concern over the outlook for the …
13th April 2017
The Bank of Korea (BoK) kept its policy rate unchanged at 1.25% today, and with the economy starting to show signs of improvement and underlying price pressures benign, we think the BoK will maintain its current stance for the rest of the year. … Korea …
With the growth outlook improving and inflation likely to remain fairly subdued, the Monetary Authority of Singapore (MAS), which today left its monetary policy settings unchanged, is likely to be in little rush to adjust its monetary policy settings. … …
There remains huge uncertainty as to how the growing crisis in North Korea will play out. Although war is likely to remain a last resort, the risk of some kind of military action is clearly growing. Even a limited conflict would cause immense damage to …
12th April 2017
Buoyant global demand should help to support growth across most of Emerging Asia over the coming quarters, but mounting domestic headwinds mean a strong rebound is not on the cards. Although the improving near-term outlook means the rate cutting cycle in …
11th April 2017
Consumer spending has grown at a steady if unspectacular pace across Emerging Asia over the past few years, comfortably outperforming other EM regions. Spending in the region should continue to grow at a decent pace, but headwinds are starting to mount in …
7th April 2017
Bangladesh has been one of the region’s top performing economies in recent years, but it is still someway short of meeting the government’s 8% growth target. If Bangladesh is to replicate the success of other fast-growing Asian countries of the past fifty …
3rd April 2017
Most of Emerging Asia’s PMIs ticked up in March. But the woes of the manufacturing sector in Korea, one of the economies where the PMIs most closely track the hard data, are not over. … Manufacturing PMIs …
Asian currencies have gained ground against the US dollar over the past month as investors have pushed back their expectations on the number of interest rate rises in the US this year. Most Asian equity markets have recorded strong gains in March. An …
31st March 2017
The US Treasury is due to report this month which of its major trading partners, if any, have been manipulating their currencies for unfair advantage. No country in Emerging Asia meets the criteria currently laid down by the US Treasury. However, the …
With the economy showing signs of recovery and inflation back within its target band, the Bank of Thailand’s (BoT) decision to leave interest rates on hold at 1.50% today came as no surprise. Looking ahead, we expect rates to remain unchanged for the rest …
29th March 2017
Growth in Vietnam eased in Q1, due in large part to the weakness of the industrial sector. However, with exports likely to remain strong and private sector credit continuing to expand at a rapid clip, growth should recover over the course of 2017. … …
Struggles to push through much-needed tax reform in the Philippines are the first sign that President Duterte’s controversial war on drugs and offensive behaviour is undermining the efforts of his administration to reform the economy. … Duterte …
24th March 2017
Today’s 25bp rate hike by the Central Bank of Sri Lanka (CBSL) is unlikely to be the last in the current tightening cycle. A combination of rapid credit growth, rising inflation and a weakening currency mean rates are likely to be raised by a further 75bp …
The decision by Taiwan’s central bank (CBC) to keep its policy rate on hold today at 1.375% came as no surprise given the recent rebound in the economy. With inflationary pressures still very weak, we expect the central bank will keep rates low for some …
23rd March 2017
Today’s decision by the central bank in the Philippines (BSP) to keep its main policy rate on hold at 3.0% had been widely expected. Looking ahead, while a growing number of analysts are predicting that the BSP will have to hike rates soon, we continue to …
Political campaigning in South Korea ahead of presidential elections due on 9th May is now well underway. Given the extent of public anger against ousted former president Park Geun-hye and her ruling party, the next president is likely to come from one of …
21st March 2017
The risk that the US may seek to renegotiate or even pull out from the Korea-US free trade agreement (KORUS) is a big concern for Korean exporters. However, there are reasons to think the US may decide against taking a harsh line with Korea in any future …
17th March 2017
Bank Indonesia (BI) left interest rates on hold today and struck a cautious tone in its statement which followed the meeting. Looking ahead, we think that worries about inflation and concerns about the currency will prevent the central bank from loosening …
16th March 2017
For most economies in Emerging Asia it will be local factors, not the actions of the US Federal Reserve, which will determine the next moves by the region’s central banks. … Asia will not follow the Fed’s …
GDP growth in Sri Lanka accelerated last quarter according to the official figures, but is likely to slow in 2017 as fiscal and monetary policy are tightened. … Sri Lanka GDP …
15th March 2017
Improving export prospects, healthy external positions and easing concerns about a large devaluation of the renminbi mean Asian currencies should hold up relatively well over the coming year even if the US Fed hikes interest rates more aggressively than …
10th March 2017
Chinese retaliation over South Korea’s plans to deploy a US anti-missile defence system (THAAD) is an added concern for Korea’s already struggling economy. While the overall impact could be quite severe, it is also likely to be relatively short-lived. … …
9th March 2017
Korea’s political crisis is approaching a key phase as the Constitutional Court prepares to rule on whether to officially impeach President Park Geun-hye. Park’s formal impeachment would increase the chances of an early fiscal stimulus and should provide …
7th March 2017
The sharp rise in headline inflation across Emerging Asia is unlikely to be the trigger for the region’s central banks to start tightening monetary policy. The increase is almost entirely due to an acceleration in energy price inflation, which has been …
3rd March 2017
With the economy gaining momentum, it was no surprise that Malaysia’s central bank (BNM) kept its policy rate unchanged at 3.0% today. Looking ahead, we expect BNM to keep interest rates steady for the rest of 2017. … Interest rates in Malaysia to stay on …
2nd March 2017
The PMIs for Emerging Asia in February were mostly encouraging, suggesting that manufacturing conditions in the region are slowly gaining a firmer footing. … Manufacturing PMIs …
1st March 2017
While most equity markets in the region rose for the second straight month in February, Asian currencies and bond yields largely held steady. Most Asian equity markets have recorded decent gains over the past month. Only the bourses in Thailand, …
28th February 2017
A jump in export demand provided a boost to economic growth in the region’s most trade dependent economies last quarter, with Hong Kong, Taiwan and Singapore all expanding at their fastest pace in nearly two years. Although relatively buoyant global …
24th February 2017
The Bank of Korea (BoK) kept its policy rate unchanged at 1.25% today, but with the economy struggling for momentum and underlying price pressures benign, we think it will resume its easing cycle later this year. … Korea holds rates, but easing cycle not …
23rd February 2017
A number of developments over the past month have cast a shadow over Indonesia’s prospects. The first was the publication of GDP figures for the final quarter of last year which showed a slowdown in the pace of growth. A fall in government spending, which …
Thailand’s economy ended 2016 on a subdued note. A combination of lacklustre external demand, high household debt and continued political uncertainty will keep growth subdued in the quarters ahead. … Thailand GDP …
20th February 2017
The sharp turnaround in Korea’s headline export growth in recent months owes more to a rebound in commodity price inflation than a recovery in underlying demand. Looking ahead, a combination of cyclical and structural factors will hold back export growth …
17th February 2017
Today’s revised estimate of Singapore’s fourth quarter GDP confirmed that the economy ended last year on a solid note. However, we expect Singapore’s growth to soften this year against a backdrop of lacklustre external demand and rising interest rates. … …
Bank Indonesia kept its policy rate on hold at 4.75% today, and we think that worries about inflation will prevent the central bank from loosening policy any further over the rest of the year too. … Bank Indonesia holds again, rates unlikely to change …
16th February 2017
Malaysia’s economy continued to gain momentum in the final quarter of last year, but against a backdrop of lacklustre external demand, high household debt and limited scope for additional policy support, we doubt growth will pick up further. … Malaysia …
The gradual deflation of what had looked like a housing bubble in Singapore has left the economy in much better shape to cope with rising interest rates. The contrast with Hong Kong, where property prices still look massively overvalued, is stark. … Hong …
10th February 2017
With the economy growing strongly but inflation under control, today’s decision by the central bank in the Philippines (BSP) to keep its main policy rate on hold at 3.0% came as no surprise. Looking ahead, we don’t think the BSP will be in a rush to …
9th February 2017
The Bank of Thailand (BoT) unsurprisingly left its policy rate on hold at 1.50% for its 14th straight meeting today. With the government prepared to do the heavy lifting to support the economy, the BoT is likely to remain on the sidelines in 2017. … Bank …
8th February 2017
The Central Bank of Sri Lanka (CBSL) kept rates on hold at its meeting today, but against a backdrop of rapid credit growth, rising inflation and a weakening currency, we think it is only a matter of time before the CBSL is forced to resume its tightening …
7th February 2017
Indonesia recorded another quarter of disappointing growth in the final quarter of last year. With commodity prices likely to remain depressed and policymakers running out of scope to stimulate the economy further, we expect growth to remain stuck at …
6th February 2017
China and Mexico were the main focus of Donald Trump’s protectionist threats on the campaign trail. But the Philippines also stands out as vulnerable to any moves by the US towards isolationism. In this Weekly we look at the main channels through which …
3rd February 2017
A strong manufacturing sector would go some way to reviving the economic fortunes of Indonesia. However, the challenges are formidable, and unless more progress is made on liberalising the labour market and improving the country’s infrastructure, the …
2nd February 2017
Emerging Asia’s PMIs for January suggest the region’s manufacturing sectors started 2017 on a lacklustre note. Focusing on the two economies where the PMIs most closely track the hard data, Taiwan’s manufacturing sector appears to be holding up well, …
Asian currencies have rebounded against the US dollar over the past month, with the Korean won leading the way. For the most part, the recent gains reflect a weak dollar, which has fallen in value against other EM and developed market currencies in recent …
31st January 2017
Large current account surpluses are sometimes a sign of economic strength. In the case of Thailand, however, where the surplus is over 10% of GDP, it is a symptom of a deeply depressed economy. … Thailand’s current account surplus is a sign of …
27th January 2017
The Philippines recorded another quarter of solid growth in Q4 and should continue to grow reasonably strongly over the forecast period. The uncertain political situation at home and Donald Trump’s election in the US represent the major downside risks to …
26th January 2017
Taiwan’s economy rebounded strongly in the final quarter of last year, but with weak global demand set to drag on exports and limited scope for more policy support, the recovery is likely to run out of steam soon. … Taiwan GDP (Q4 …
25th January 2017
Korea’s economy ended 2016 on a soft note, and we expect growth will slow further in the quarters ahead against a backdrop of mounting external and domestic headwinds. … Korea GDP (Q4 …
24th January 2017
