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With the economy growing at a decent pace but inflationary pressures under control, today’s decision by the central bank in the Philippines (BSP) to keep its main policy rate on hold at 4.0% came as no surprise. Looking ahead, a move to an interest rate …
12th May 2016
The Bank of Thailand’s (BoT) decision to keep its policy rate unchanged at 1.50% today came as no surprise. With the economy exiting deflation and growth still on track to come in around 3% in 2016, we expect rates to be kept on hold for the remainder of …
11th May 2016
Rodrigo Duterte, the mayor of the fourth largest city in the Philippines, looks to have won today’s presidential election by a comfortable margin. Given how little has been said on the campaign trail about the economy, it is difficult to determine what …
9th May 2016
The Philippines has been one of the region’s few economic success stories over the past few years. But with the controversial Rodrigo Duterte riding high in the polls ahead of presidential elections on Monday, the country could be about to take a backward …
6th May 2016
The slowdown in Indonesia's economy last quarter reflects significant headwinds that we think will keep growth stuck at around 5% for the next couple of years. … Indonesia GDP …
4th May 2016
Manufacturing conditions in Emerging Asia remained lacklustre in April. In the two economies where the PMIs most closely track the hard data, there are some signs of stabilisation in Korea’s manufacturing sector, but Taiwan’s appears to have taken a turn …
3rd May 2016
The IMF today announced that it has reached a staff-level agreement with Sri Lanka on a three-year US$1.5bn loan. The deal should help Sri Lanka avoid a balance of payments crisis and stabilise investor confidence, but policy tightening is set to hold …
29th April 2016
There have been a number of suggestions recently that some central banks in Emerging Asia, namely in Taiwan and Korea, might be about to adopt some of the unconventional policy measures that are being tried by the world’s major central banks. Evidence …
Today’s GDP figures confirm that Taiwan’s economy is struggling badly, with GDP contracting by 0.8% y/y in the first quarter of the year. Given that policymakers are running out of room to stimulate the economy and that exports are likely to remain …
Most currencies and equity markets are up so far this month. The Malaysian ringgit has continued to rebound strongly, but political uncertainty ahead of presidential elections in the Philippines is weighing on sentiment there. … Malaysian ringgit …
28th April 2016
Vietnam and Thailand are facing their worst drought in decades, with water levels in the Mekong River at their lowest since 1926. The drought is already having an impact on growth. A decline in agricultural output was the main cause of the slowdown in …
27th April 2016
The central bank in Sri Lanka (CBSL) today held its deposit and lending rates at 6.5% and 8.0%, respectively. But with credit growing rapidly and core inflation high, we expect rate hikes to come back onto the agenda soon. … Sri Lanka holds rates, but …
26th April 2016
Korea’s economy lost further momentum in the first quarter of 2016, but we expect a modest recovery in exports as well as supportive policies to help prop up growth in the coming quarters . … Korea GDP (Q1 …
Most governments in Emerging Asia have room to support their economies by loosening fiscal policy further in the event that growth continues to disappoint. However, there are a few countries, namely Indonesia, Malaysia and Sri Lanka, where governments …
22nd April 2016
With Bank Indonesia (BI) having announced on Friday that it is planning to replace its main policy rate because the current rate has little influence over commercial banks’ lending rates, a fourth rate cut in as many months at today’s meeting never looked …
21st April 2016
The Bank of Korea (BoK) today left its policy rate unchanged at a record low of 1.50% , b ut with the economy still in a fragile state, monetary policy loosening looks to be on the cards in the coming months. The replacement of four of the BoK's seven …
19th April 2016
Bank Indonesia today unveiled some adjustments to its policy regime which it hopes will prompt commercial banks to lower their lending rates. If the moves are a success, they should lead to an acceleration in credit growth and provide an important boost …
15th April 2016
The export downturn that began over a year ago is showing little sign of coming to an end. A big part of the reason for the current weakness has been the slump in commodity prices. Even if commodity prices don’t recover, the drag on the year-on-year …
Yesterday’s parliamentary elections in Korea, which saw the governing Saenuri Party suffer a defeat, represent a major blow to the authority of President Park Guen-hye and further reduce the likelihood of the reforms needed to address the country’s …
14th April 2016
The Monetary Authority of Singapore (MAS) today moved to flatten the slope of its nominal effective exchange rate policy band, a decision that amounts to a loosening of its policy stance. But with inflation likely to rise over the coming months, we doubt …
Financial markets across Emerging Asia have rebounded in recent months as investors have become more confident over the short-term economic outlook for the region. However, as we make clear in our recently published Emerging Asia Outlook, the risks have …
8th April 2016
The region’s original tiger economies, Hong Kong, Singapore, Taiwan and Korea, are likely to struggle over the next couple of years against a backdrop of cooling credit growth, bursting property bubbles and mounting structural problems. The outlook is …
6th April 2016
Much is at stake as the Philippines prepares to go to the polls on 9th May. The current president, Benigno Aquino, who is forbidden from standing again, deserves much of the credit for turning the country’s fortunes around since his election in 2010. But …
5th April 2016
As a small, very open economy that releases GDP data much earlier than most other countries, Singapore is often billed as a bellwether for the global economy. In reality, Singapore’s GDP is far too volatile to give a reliable indication of how the world …
1st April 2016
Emerging Asia’s PMIs picked up across the board last month but, while the worst appears to be over for the region’s manufacturing sectors, conditions remain weak. … Manufacturing PMIs …
Asian currencies continued their recovery in March, helped in part by fading fears of a sudden devaluation in the renminbi. … Korean won leads the …
31st March 2016
Today’s handover from military to civilian rule in Myanmar marks another welcome step forward in the country’s political development. But the new government must overcome a number of major challenges if the economy is to meet its full potential. A key …
30th March 2016
Despite mounting concerns over rapid credit growth, rising inflation and a weakening currency, the central bank in Sri Lanka (CBSL) opted to keep its key policy interest rates unchanged at its meeting today. We don’t think it will be long before the …
29th March 2016
Taiwan’s central bank (CBC) cut its discount rate by 12.5 basis points to 1.50% today against a backdrop of very weak growth and low inflationary pressures. Further cuts to the discount rate are likely if the economy fails to recover, but the CBC is …
24th March 2016
Vietnam has been one of the region’s fastest growing economies over the past couple of years, and looks set for another year of strong growth in 2016. But risks are starting to build, and policymakers’ complacency over the latest surge in credit growth is …
The Bank of Thailand (BoT) unsurprisingly kept its policy rate unchanged at 1.50% today. With the government stepping up efforts to support growth, we expect rates to be left on hold throughout 2016. … Fiscal policy to take lead over monetary policy …
23rd March 2016
With the economy steadily gaining momentum but inflation very low, today’s decision by the central bank of the Philippines (BSP) to keep its key policy rate on hold at 4.0% came as no surprise. Looking ahead, we think the central bank will be in little …
Property prices in Singapore have fallen for ten consecutive quarters and we expect the slide to continue. The gradual deflation of what had looked like a potential housing bubble has left the economy in much better shape to cope with rising interest …
18th March 2016
A rebounding currency, subdued economic growth and inflation, and the Fed’s dovishness yesterday all fed into Bank Indonesia’s decision to cut its main policy rate for the third time in as many months. But we believe the balance of risks will shift in …
17th March 2016
Sri Lanka’s request for an IMF loan should ease fears about a potential balance of payments crisis, but the mistakes that put the country in this position will need to be addressed. Most importantly, policy will need to be tightened, which will weigh on …
16th March 2016
Today’s GDP figures suggest Sri Lanka’s economy slowed sharply in the fourth quarter of 2015. However, we would be wary of reading too much into the data, given the serious doubts that remain over the reliability of the rebased GDP figures. The big …
15th March 2016
After a few years of heavy declines, Asian currencies have started to make up some lost ground against the US dollar. We think other forecasters are being too negative in expecting the region’s currencies to start weakening again. … Better times ahead …
11th March 2016
The Bank of Korea (BoK) today left its policy rate unchanged at a record low of 1.50%. The pressure for a rate cut is building against a backdrop of softening economic data, but we are sticking with our forecast for rates to be left on hold for now. … …
10th March 2016
Malaysia’s central bank (BNM) today kept its policy rate on hold at 3.25% at a monetary policy meeting that will be Governor Zeti’s last after 16 years at the helm. We continue to think rates will be kept unchanged this year, but uncertainty around the …
9th March 2016
With productivity slowing and working age populations set to fall sharply, economic growth in Hong Kong, Singapore, Taiwan and Korea is likely to average little more than 2% over the coming years. This is much slower than either the consensus or IMF are …
8th March 2016
Inflation looks to have bottomed out and is set to rise across most of Emerging Asia over the coming year. However, it will remain relatively low in most places, meaning central banks will be able to keep interest rates low to support growth. … …
7th March 2016
Malaysia’s high level of household debt is unlikely to trigger financial instability, but it will continue to be another constraint on growth. … High household debt another drag on Malaysia’s …
Emerging Asia’s PMIs fell back in February, offering no signs that the woes of the region’s manufacturing sectors are over. … Manufacturing PMIs …
1st March 2016
After a rocky start to the year, Asian markets have settled down over the last month as investors have pushed back their expectations for the next rate hike in the US and oil prices stabilised. … Asian markets mixed, Indonesia top …
29th February 2016
Indonesia’s economy now looks to be past the worst, but the government will need to make further progress on reform if growth is to break above 5% over the next couple of years. We don’t think it is time to raise our forecasts just yet. … Improving …
26th February 2016
Political campaigning in the Philippines ahead of presidential elections due on 9 th May is now well underway. Grace Poe, an independent candidate and adopted daughter of Fernando Poe, a defeated presidential candidate from 2004, is currently ahead in the …
Today’s revised estimate of Singapore’s fourth quarter GDP confirmed that the economy ended last year strongly. However, it will face headwinds in 2016. While we think export conditions will improve slightly, higher interest rates and rising inflation …
24th February 2016
The central bank in Sri Lanka (CBSL) has delivered a surprise by hiking both its policy interest rates by 50bp. Against a backdrop of rapid credit growth, building price pressures and currency weakness, further monetary tightening looks likely. … Sri …
19th February 2016
The recent weakness of Asian exports has stoked fears about the region’s growth prospects. However, regional GDP growth remained stable in the fourth quarter of 2015. Strong domestic demand is likely to ensure that Emerging Asia grows at a relatively …
Bank Indonesia today cut its main policy rate by 25 basis points to 7.00%. We believe that one more cut is likely in this cycle. Today’s statement hints that, as long as the recent market calm persists, it is likely sooner rather than later, before US …
18th February 2016
