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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
Malaysia’s economy slowed further in Q4, with growth dropping to 4.5% y/y from 4.7% the quarter before. Against a backdrop of low commodity prices and high household debt, the slowdown looks set to deepen this year. … Malaysia GDP …
The Bank of Korea (BoK) left its policy rate unchanged at a record low of 1.50% today against a backdrop of heightened financial market volatility. While we can’t rule out a rate cut in the coming months, especially after the BoK took a slightly more …
16th February 2016
Thailand’s growth eased slightly in the final quarter of 2015, to a seasonally-adjusted 0.8% q/q from 1.0% the quarter before. While fiscal spending should help prop up the economy in 2016, the pace of the recovery will be gradual, given the backdrop of …
15th February 2016
The recent slowdown in remittances to the Philippines is not a major cause for concern. In fact, with other sectors of the economy, notably manufacturing and business outsourcing, growing strongly, there are welcome signs the economy is finding other …
12th February 2016
The decision by the central bank of the Philippines (BSP) to keep its main policy rate on hold at 4.0% came as no surprise. With growth picking up but inflation low, we doubt the central bank will be in any rush to raise rates. We expect the policy rate …
11th February 2016
The sharp rise in Korea’s private sector debt over the past decade has raised concerns about financial stability. While there are good reasons to believe that a crisis is not in the offing, Korea will face some repercussions from its credit binge. The …
10th February 2016
Bangladesh is one of the best-placed countries in Asia to take advantage of rising costs in China, and we expect it to grow by around 6% a year on average over the next decade. Given its size and potential, Bangladesh should perhaps be getting more …
5th February 2016
Indonesia’s growth picked up to 5.0% y/y in Q4, from 4.7% in Q3, but the expansion was still well below the 5.8% average recorded over the past decade. Looking ahead, looser monetary policy should support the economy, but with commodity prices set to …
The Bank of Thailand’s (BoT) decision to keep its policy rate unchanged at 1.50% today came as no surprise. With the economy gradually recovering and the government stepping up efforts to support growth, we expect rates to be kept on hold throughout …
3rd February 2016
The January PMIs for Emerging Asia were generally disappointing and underline the fragility of the region’s manufacturing recovery. … Manufacturing PMIs …
1st February 2016
Asia’s markets were badly caught up in the global sell-off earlier in the month, and although sentiment seems to have settled down in recent days, most of the region’s equity markets are still down year-to-date. Similarly, the majority of Asian currencies …
29th January 2016
Hong Kong made international headlines last week after it was shown to have the least affordable property market in the world. But Hong Kong is not the only economy in the region where property prices look out of line with fundamentals. Prices also look …
Taiwan’s economy climbed out of recession last quarter and we expect the recovery to gain momentum this year, as growth in Taiwan’s main trading partners picks up and domestic demand strengthens. … Taiwan GDP (Q4 …
Vietnam’s new top leadership team, which has just been unveiled, takes the reins at a key moment for the economy. Although short-term prospects remain good, further reforms are needed for the economy to achieve its full potential. … Key challenges await …
28th January 2016
