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The US Fed looks almost certain to raise interest rates at its meeting later today. For most of Emerging Asia, higher rates in the US do not pose a major threat, even if the US Fed ends up hiking rates more aggressively than is generally expected over the …
14th June 2017
Many of the risks facing Emerging Asia’s economies have receded in recent months. The key exception is the continued rapid build-up of debt in China. A bursting of China’s credit bubble would have serious implications for the rest of the region. … China …
9th June 2017
The fall in Philippines inflation from 3.4% y/y in April to 3.1% y/y in May adds weight to our view that it is now past its peak. The modest decline was a touch lower than our forecast of 3.2% (Bloomberg consensus: 3.3%). … Philippines and Taiwan Consumer …
6th June 2017
South Korea’s new government today announced plans for a supplementary budget worth 11.2trn won (0.7% of GDP). But with parliament approval by no means guaranteed, we are not raising our growth forecasts just yet. … What to make of Korea’s supplementary …
5th June 2017
The region’s rate cutting cycle has come to an end, but with inflation set to remain fairly subdued, interest rates are likely to remain low for some time yet. … Policy rates to remain low for longer than consensus …
2nd June 2017
Most of Emerging Asia’s manufacturing PMIs slipped in May, but we doubt this marks the start of a significant downturn in Asian manufacturing. … Manufacturing PMIs …
1st June 2017
Asian equity markets have outperformed other EM markets over the past month, with bourses in Korea, India, Pakistan and Indonesia all reaching record highs in May. We are revising our equity forecasts to reflect this recent strength. … Asian equities …
31st May 2017
We have been arguing for some time that Emerging Asia’s current credit binge is unsustainable, and that credit growth in a number of countries will need to slow for a crisis to be avoided. Encouragingly, credit growth has started to decline in Thailand …
26th May 2017
The Bank of Korea (BoK) left interest rates on hold today and the governor’s accompanying press conference makes clear the central bank is in little hurry to adjust rates anytime soon. We continue to expect the policy rate to be kept at 1.25% not just for …
25th May 2017
Today’s revised estimate of Singapore’s first quarter GDP showed that the economy fared better than previously estimated in Q1. Looking ahead, we expect healthy export demand will continue to support Singapore’s economy this year. … Singapore GDP (Q1 …
With the economy gaining momentum and price pressure benign, it was no surprise that the Bank of Thailand (BoT) left its policy rate on hold at 1.50% today. Looking ahead, we expect the BoT to keep interest rates unchanged for the rest of this year and …
24th May 2017
The decision on Friday by the rating agency, S&P, to upgrade Indonesia to investment grade rating was long overdue. At under 30% of GDP, Indonesia has one of the lowest levels of government debt in the region. Last year the government demonstrated its …
19th May 2017
Economic growth in Emerging Asia picked up again in the first quarter of the year, thanks largely to stronger export demand. The slowdown that now appears to be underway in China is unlikely to derail the recovery, and we expect growth in the rest of the …
Figures released today show that Malaysia’s economy gained strong momentum in Q1. Robust global demand, loose monetary policy and a recovery in energy prices should continue to support growth in Malaysia over the coming quarters, and we are raising our …
With inflationary pressures rising, Bank Indonesia’s (BI) decision to leave interest rates on hold today came as no surprise. The central bank’s accompanying statement struck a fairly cautious tone, supporting our view that interest rates will remain on …
18th May 2017
The Philippines recorded another quarter of solid growth in Q1 and should continue to grow reasonably strongly over the near term, supported by a decent recovery in exports and healthy domestic demand. … Philippines GDP …
The most important impact of a full-scale conflict on the Korean peninsula would be a massive loss of life. But there would also be significant economic consequences. In this Focus we discuss the consequences of a war on the Korean economy, as well as the …
17th May 2017
Figures released today show Thailand’s economy started 2017 on a solid note. We expect growth to pick up a little further in the coming quarters, helped by robust external demand, supportive fiscal and monetary policies, and the current state of relative …
15th May 2017
One of the biggest challenges facing South Korea’s newly elected president, Moon Jae-in, is the country’s dreadful demographic outlook. Although there are steps the new government could take to boost fertility rates and encourage more women into the …
12th May 2017
Despite the recent spike in inflation, 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 …
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. But while the consensus among analysts is that the BSP will hike rates twice this year, we continue to think that rates …
11th May 2017
The election of Moon Jae-in as South Korea’s next president is unlikely to have a major impact on the country’s economic outlook. Moon’s Democratic Party not only lacks a majority in parliament, but his policy proposals are nowhere near bold enough to …
9th May 2017
The central bank in Sri Lanka (CBSL) today left interest rates on hold, but a combination of rapid credit growth, high inflation and a weak currency suggests further tightening is only a matter of time. … Sri Lanka holds rates, pause unlikely to …
Even without the US, the Trans-Pacific Partnership (TPP) could still provide a decent boost to the four countries from Emerging Asia included in the deal. The risk is that without the carrot of access to the large US market, countries will row back on …
5th May 2017
Indonesia recorded another quarter of disappointing growth in the first quarter of this year, with GDP expanding by 5.0% y/y. Looking ahead, with commodity prices likely to stay relatively depressed and credit growth set to remain weak, we expect GDP …
In addition to the growing geopolitical crisis on the Korean Peninsula, South Korea’s next president, who will be elected on 9 th May, will face a mounting number of economic challenges, including worsening demographics, rising household debt and growing …
4th May 2017
The April PMIs for Emerging Asia suggest that the region’s manufacturing recovery remained intact. Focusing on the two economies where the PMIs most closely track the hard data, Taiwan’s manufacturing sector remains in good health, while Korea’s is …
2nd May 2017
Chinese trade restrictions and mounting tensions with North Korea have failed to dent the rally in South Korea’s equity market, which is nearing a record high. … Korean equities reach a six-year …
28th April 2017
A combination of loose monetary policy and increased infrastructure spending related to the China Pakistan Economic Corridor (CPEC) should push up growth in Pakistan to its fastest pace in over a decade this year. But further ahead, a lack of progress on …
Taiwan’s economy slowed slightly in the first quarter of the year, but given the improving prospects for the global economy and supportive domestic monetary and fiscal policies, we expect growth to pick up in the coming quarters. … Taiwan GDP (Q1 …
Korea’s economy began 2017 on a strong note, and while we expect growth to hold up reasonably well in the near term, we doubt the Q1 outturn marks the start of a sustained recovery. … Korea GDP (Q1 …
27th April 2017
A sharp fall in the Philippines’ current account surplus is fueling fears that the economy is overheating. We think such fears are overdone. … Philippines – current account deficit no cause for …
21st April 2017
Despite the relatively poor growth outlook, Bank Indonesia (BI) left its key policy rate on hold at 4.75% today. With inflation set to rise over the coming months and the rupiah vulnerable to sudden shifts in investor risk appetite, we expect rates will …
20th April 2017
Consumer price inflation in Malaysia accelerated to a new eight-year high in March, but we see little prospect of a rate hike any time soon. … Malaysia in no rush to hike rates despite further rise in …
19th April 2017
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, …
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
