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GDP growth in the Philippines slowed in Q1 and we expect further weakness over the rest of the year as tight monetary policy, slower growth in remittances and weaker export demand weigh on activity. According to the data published today, GDP growth …
9th May 2024
The national accounts data released today suggest that economic growth in Indonesia remained broadly stable last quarter, but we don’t have much faith in the official data. With economic activity likely to remain weak and concerns about inflation and the …
6th May 2024
Rate cuts still likely despite strong Q1 growth In a speech this week at an Asian Development Bank conference, Bank of Korea Governor Rhee said that strong GDP growth in the first quarter meant the Bank would need to reconsider the timing of possible …
3rd May 2024
Korea is one of the few countries in the region where inflation is still above target. However, with economic growth set to slow and the government stepping up efforts to bring food prices down, we expect the headline rate to fall back to target by the …
2nd May 2024
The PMIs from Emerging Asia remained weak in April. We think manufacturing activity across most of Asia will remain subdued in the near term but output in Taiwan and Korea is likely to hold up better than that in the rest of the region. The weighted …
Emerging Asia Chart Pack (April 2024) …
30th April 2024
Taiwan’s economy accelerated in y/y terms last quarter and we expect growth to remain strong over the coming year, helped by robust demand for AI-related products. Economic growth slowed in q/q terms but the strength of the economy over the past year …
All the signs suggest that a second Trump administration would take a more protectionist approach to trade. Export demand in Mexico, East Asia and ASEAN would be particularly hard hit by a universal US import tariff or a dollar devaluation, and those …
29th April 2024
Surprise hike by Bank Indonesia Bank Indonesia surprised financial markets (and ourselves) when it raised interest rates at its scheduled meeting on Wednesday. The hike was a direct response to the increased uncertainty in global financial markets …
26th April 2024
GDP growth in Korea rose sharply in Q1 but we don't expect this strength to last. Weak global growth is set to weigh on exports in the near term while tight monetary and fiscal policy will curtail domestic demand. Today’s figures show that the economy …
25th April 2024
In a surprise move, Bank Indonesia (BI) today hiked its main policy rate by 25bps (to 6.25%) and made clear that supporting the currency would remain its key priority over the coming months. But there is a good chance this will be a case of “one and …
24th April 2024
Hike aimed at supporting the currency In a surprise move, Bank Indonesia (BI) today hiked its main policy rate by 25bps (to 6.25%), and made clear that supporting the currency would remain its key priority over the coming months. However, with …
A weak labour market and high interest rates will continue to weigh heavily on Korea’s consumer sector this year. The poor prospects for consumer spending is one of the main reasons we think overall GDP growth will remain subdued. Korea’s recovery from …
22nd April 2024
Recent currency falls and higher oil prices are unlikely to put significant upward pressure on consumer prices across Asia. We continue to expect inflation in the region to remain low over the coming year. Consumer price inflation has fallen back sharply …
Worries about the currency Bank Indonesia is the only central bank in emerging Asia that has a mandate to ensure currency stability. It surprised markets (and us) when it raised interest rates to support the rupiah at its October meeting. With the …
19th April 2024
The economy rebounded during the first quarter but we continue to expect the economy to grow below trend this year as a whole. Elevated interest rates, a cooling labour market, soft foreign demand and tighter fiscal policy are all likely to curtail …
Local factors will determine the next moves by most of Asia’s central banks, not the actions of the US Fed. We expect policymakers in Thailand, Vietnam, the Philippines and Korea to lower interest rates later this year, regardless of whether the Fed cuts. …
16th April 2024
Is Yoon now a lame duck? President Yoon’s People Power Party (PPP) in Korea won just 108 of the 300 seats up for grabs in this week’s parliamentary election, down from 119 in the previous parliament. That left the Democratic Party (DP) and some smaller …
12th April 2024
The Bank of Korea left its policy rate on hold today (at 3.5%), but kept open the possibility of rate cuts later this year. However, with inflation concerns continuing to linger, we are pushing back the timing of when we think the central bank will cut …
On hold, early rate cut unlikely With inflationary pressures lingering, the currency falling sharply and expectations of a rate cut by the US Federal Reserve being pushed back, the prospect of an early rate cut by the Bank of Korea (which today left …
The Monetary Authority of Singapore (MAS) kept policy settings unchanged today, as expected, but with the economy set to remain weak and core inflation on track to resume its downward trend soon we think the MAS will loosen policy at its meeting in …
BoT on hold, but cuts likely later in the year Thailand’s central bank (BoT) today resisted pressure from the government to loosen monetary policy, but with growth set to remain weak and inflationary pressures very subdued, we still think rate cuts are …
10th April 2024
Taiwan will be one of the main beneficiaries of a lengthy global AI investment boom. We expect its economy to growth much faster over the rest of this decade than it did during the 2010s. It already appears that global excitement about the possibilities …
9th April 2024
Forecast change after hawkish BSP meeting The central bank in the Philippines (BSP) today left its main policy rate unchanged (at 6.50%), but sounded more hawkish than we had expected on inflation. Accordingly, we are pushing back the timing of when we …
8th April 2024
BoT tightened in 2023 policy despite weak data The Bank of Thailand surprised most economists and financial markets last year when it continued to tighten monetary policy even as inflation dropped well below target (see Chart 1) and growth slowed. Chart …
5th April 2024
Vietnam’s banks are likely to remain cautious this year and both credit and GDP growth are likely to come in below trend. The central bank will have to cut rates further to stimulate demand. The health of Vietnam’s banking sector worsened last year due to …
4th April 2024
Taiwan’s chip industry has invested heavily in making its facilities resilient to earthquakes. Disruption to production is unavoidable when a large earthquake strikes, but firms are usually able to return to close to full operating capacity within days if …
3rd April 2024
The PMIs from Emerging Asia remained weak in March. We think manufacturing sectors across most of Asia will struggle in the near term but activity in Korea and Taiwan is likely to remain strong. The weighted average headline PMI for Emerging Asia rose …
1st April 2024
Singapore’s core inflation not as sticky as it seems Singapore experienced one of the biggest post-pandemic inflation spikes in Asia. Core price pressures even now are among the highest in the region. (See Chart 1.) Chart 1: Core Inflation (%, y/y) …
28th March 2024
Overview – With inflation easing and domestic demand struggling in much of emerging Asia, central banks are likely to start cutting interest rates soon. The one remaining concern for policymakers is the fear of further falls in their currencies. But this …
27th March 2024
Emerging Asia Chart Pack (March 2024) …
26th March 2024
The Central Bank of Sri Lanka today cut interest rates by a further 50bps and hinted at further rate cuts to come. With inflationary pressures under control and the economic recovery struggling, more policy easing is likely before the end of the year. …
Political uncertainty in Vietnam on the rise One of Vietnam’s key appeals to foreign investors is its political stability relative to other low-income countries in the region. (See Chart 1.) Along with low labour costs and an improving business …
22nd March 2024
Despite the booming economy, inflationary pressures in Taiwan are likely to remain subdued. Accordingly, we think today’s unexpected rate hike by the central bank (CBC) will prove to be a case of one and done. Today’s decision to raise the policy rate by …
21st March 2024
Surprise hike but further tightening unlikely Taiwan’s central bank (CBC) unexpectedly raised its main policy rate today amid concerns about inflation. However, we think the central bank’s concerns are overdone, and expect this to be a case of one and …
We hosted an online briefing to discuss EM financial risks in more detail. Watch the recording here . Our risk indicators are presented as an interactive EM dashboard on our website here . The past few years have sharpened investors’ focus on assessing …
20th March 2024
Interest rates left unchanged, first rate cut in June Bank Indonesia left its policy rate on hold at 6.00% at its scheduled meeting today, and hinted at cuts later in the year. With inflation under control and the currency holding up well against the US …
Donald Trump’s threat to impose a blanket 10% tariff on all US imports would hit Vietnam hard. But provided they were accompanied by a 60% tariff on all imports from China (as Trump has also threated), then Vietnam should benefit from a new round of Trump …
18th March 2024
CBC on hold despite booming economy Despite the booming economy, inflation in Taiwan has been falling back in recent months. Accordingly, we expect the central bank (CBC) to leave interest rates unchanged at its meeting on Thursday. GDP growth has …
15th March 2024
Activity holding up The second estimate of Korea’s GDP figures published this week confirmed that the economy grew by 0.6% q/q in the final quarter of last year. Encouragingly, the more recent monthly activity data suggest the economy made a decent start …
8th March 2024
Rates on hold throughout 2024 Bank Negara Malaysia (BNM) left its overnight policy rate on hold (at 3.0%) today, and hinted in its statement that it was in little rush to change interest rates any time soon. This supports our view that the policy rate …
7th March 2024
Korea election: reform prospects in the balance President Yoon Suk-yeol has seen a rebound in his popularity in recent weeks, with an opinion poll published today showing an approval rating of 39% – up from a low earlier this year of just 29%. The …
1st March 2024
The February PMIs for economies in Emerging Asia edged down last month and were mostly inside contractionary territory. The outlook for manufacturing in the region remains poor in the near term, with high interest rates and weak foreign demand likely to …
Emerging Asia Chart Pack (February 2024) …
28th February 2024
Trouble in Thailand Figures published earlier this week showed that Thailand’s economy contracted by 0.6% in the final quarter of last year. Thailand has experienced by far the slowest recovery from the pandemic in the region – GDP is now just 0.5% …
23rd February 2024
The Bank of Korea left its policy rate on hold today (at 3.5%) and attempted to push back against expectations for an early rate cut. However, with inflation likely to be back to target soon and domestic demand struggling, we expect easing to begin in …
22nd February 2024
On hold again, easing coming soon The Bank of Korea (BoK) kept its main policy rate unchanged today (at 3.5%), but with inflation cooling and growth set to struggle, we don’t think cuts are far away. The decision was correctly predicted by all 38 …
Bank Indonesia left its policy rate on hold at 6.00% at its meeting today, and once again reiterated its plans to start loosening policy later in the year. We expect the central bank to start cutting rates in Q2. Today’s decision was correctly predicted …
21st February 2024
After a couple of years in the doldrums, property construction in Korea is rebounding. The recovery in the sector should provide an important prop to economic growth this year. There are encouraging signs that the worst is over for Korea’s property …
20th February 2024
Thailand’s economy contracted in Q4 due to weaker domestic demand. Looking ahead, we expect steady, if unspectacular, growth this year with a further rebound in tourism and strong government spending set to support demand. The 0.6% q/q fall in GDP was …
19th February 2024
