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The Bank of Korea (BoK) kept its policy rate unchanged at a record low of 1.50% today as fears over the possible implications of Fed tightening offset worries about the recent weakness of the economy. Further ahead, concerns about high debt levels mean …
11th September 2015
Singapore is holding a general election on 11th September and there is little doubt that the People’s Action Party (PAP) will once again be returned to power. Nevertheless, the PAP will want to improve on its performance in 2011, when it received its …
4th September 2015
Thailand’s economy started the second half of 2015 on a weak note, and while the recently announced fiscal stimulus package should help support demand, it is unlikely to be a game-changer. Rising political uncertainty, coupled with high household debt and …
3rd September 2015
Emerging Asia's PMIs remained weak in August, suggesting the region’s manufacturing sectors continue to struggle. In the three economies where the PMIs most closely track the hard data, the surveys point to further declines in manufacturing output. … …
1st September 2015
Bank Indonesia’s poor record in meeting its inflation target has led to claims that it is being too soft on inflation. We believe such claims are wrong, and continue to think inflation will drop back sharply bythe end of the year, possibly opening up the …
Asian financial markets have been at the centre of the recent financial market turmoil that was triggered by fears about the health of the Chinese economy. The sell-off has raised concerns that a repeat of the Asian Financial Crisis is looming, but such …
31st August 2015
The first contraction in exports since the global financial crisis dragged down growth in Emerging Asia to its lowest in over three years last quarter. However, we expect a turn around over the coming quarters. Exports should mount some kind of recovery …
28th August 2015
The financial turmoil of the past month in Asia has seen foreign investors scramble for the exit. Net foreign outflows from the region’s equity markets have reached nearly US$10bn so far in August, which is the highest in any month since the “Taper …
27th August 2015
GDP growth in the Philippines rebounded in the second quarter after slipping to its slowest rate in over three years in Q1. Conditions in the domestic economy look healthy, and a recovery in exports should help drive a further pick-up in growth over the …
The scandal over 1MDB is not the biggest threat to Malaysia’s short-term economic outlook or the main cause of the recent collapse in the ringgit. However, it does shine a light on institutional failings that are holding back Malaysia’s long-term …
25th August 2015
A sense of panic gripped Asian markets today, creating concerns over the outlook for the region’s economies. In this Update we answer five questions that have been raised by the market moves. … Five questions and answers about the market …
24th August 2015
The recent tumble in Asian currencies has given rise to concerns that the region could be onthe brink of a repeat of the Asian financial crisis. In general, these suggestions are over the top.There are more differences than similarities between the …
21st August 2015
Although today’s decision by the State Bank of Vietnam (SBV) to devalue the dong by a further 1% against the US dollar and widen the trading band was in part linked to China’s devaluation of the renminbi last week, we doubt it was part of a broader …
19th August 2015
The bombings in Thailand’s capital present a new downside risk to the country’s economic outlook. Not only are the attacks a blow to the important tourism sector, they also add to concerns about political stability. … Bombings add to Thailand’s economic …
We see little prospect of ASEAN transforming itself into the kind of single market and production base that would allow it to challenge China as the manufacturing workshop of the world. Nevertheless, parts of South East Asia should still perform strongly …
Financial markets are likely to welcome the re-election of Ranil Wickremasinghe as Sri Lanka’s prime minister. However, with the new prime minister likely to have to govern as part of a coalition, aperiod of political uncertainty is likely to follow. … …
18th August 2015
Thailand's economy expanded by 2.8% y/y in the second quarter, down from 3.0% the quarter before, reflecting weaker private consumption and investment growth. Against a backdrop of high household debt, a recent drought and waning export competitiveness, …
17th August 2015
The last week has been dominated by concerns that the People’s Bank of China was embarking on a competitive devaluation of the renminbi and fears that the Chinese economy might be heading for a “hard landing“. Neither seemed likely to us, and today's …
The central bank in the Philippines (BSP) today left its policy rate on hold at 4.0%. With growth set ton recover in the coming quarters, but inflation likely to remain low, we think the central bank will be in little hurry to adjust monetary policy. … …
13th August 2015
Considering the headwinds that were facing Malaysia’s economy in the second quarter – such as the introduction of the Goods & Services tax (GST) in April, low commodity prices and the generally weak global environment – growth of 4.9% y/y was a good …
The Bank of Korea (BoK) kept its policy rate unchanged at a record low of 1.50% today, despite talk of a fresh round of "currency wars" across Asia following the People's Bank of China's decision to lower the daily reference rate for the renminbi in …
The second downward revision to the People‘s Bank of China‘s daily reference rate for the renminbi has today intensified talk that a fresh round of “currency wars“ is about to sweep across Asia. We think that is unlikely. So far, the drop in the renminbi …
12th August 2015
The revised estimate of Singapore’s Q2 GDP confirmed that the economy contracted sharply last quarter. Given that Singapore’s economy is highly volatile, the Q2 contraction is not, on its own, cause for alarm, but the subdued outlook for global demand and …
11th August 2015
As Singapore celebrates its 50th anniversary since independence on 9th August, it can look back on a half-century in which it achieved enormous economic success. However, the country goes into its second 50 years facing doubts over the suitability of a …
7th August 2015
The Bank of Thailand’s (BoT) kept its policy rate on hold at 1.5% today, but with the economy still struggling for momentum, we think it is still too early to call the end of the easing cycle. We continue to see scope for one more 25bp cut this year. … …
5th August 2015
Indonesia's economy recorded another quarter of weak growth in Q2, again showing the negative effects of lower commodity prices. If, as we expect, there is no improvement in the second half of the year, pressure on Bank Indonesia to reduce interest rates …
Although most of Emerging Asia's PMIs ticked up in July, the woes of the region's manufacturing sectors are far from over. In fact, in the three economies where the PMIs most closely track the hard data, the surveys still point to falling manufacturing …
3rd August 2015
Asian currencies have fallen again over the past week, with a number now at multi-year low sagainst the US dollar. With the exception of Malaysia, where US dollar debt is high, currency weakness is not a major threat to the region. In fact, in so far as …
31st July 2015
A new manufacturing PMI survey for Malaysia launched by Nikkei and Markit earlier this month appears to track the hard data reasonably well and points to a further slowdown in the manufacturing sector in the months ahead. … How useful is Malaysia's …
GDP growth in Taiwan slowed much more sharply than expected in the second quarter of the year, with the recent slump in export demand taking a heavy toll on the economy. However, there are reasons to think that the economy will turn a corner soon on the …
Asian currencies have been caught up in a general sell-off of EM assets this month, as interest rate hikes in the US have started to loom. Some currencies are now at or close to multi-year lows. That said, with a couple of exceptions, Asian currencies …
30th July 2015
The controversy surrounding the state investment company, 1Malaysia Development Bhd (1MDB), has intensified in recent days after Prime Minister Najib Razak, who has been accused of taking money from the fund, on Tuesday sacked his deputy prime minister, …
29th July 2015
There is concern among some parts of Taiwan’s business community that a cooler stance toward China under the next government could hurt the economy. However, closer relations between China and Taiwan have not delivered the benefits that its proponents …
24th July 2015
Korea's economy slowed sharply in the second quarter, reflecting the outbreak of Middle East Respiratory Syndrome (MERS). But with the worst of the MERS outbreak over, Korea's economy should recover over the coming quarters, supported by a combination of …
23rd July 2015
A severe drought in Thailand is hurting its agricultural sector and adding to the country’s economic woes. Rising downside risks to growth will increase pressure on the Bank of Thailand (BoT) to provide further policy support. … Drought adds to …
21st July 2015
In our Q3 Emerging Asia Outlook , which was published on Thursday, we rolled out our forecasts to include 2017. This Weekly looks in more detail at the region’s growth prospects for the year after next. … What to expect from Asia in …
17th July 2015
After a poor start to 2015, we expect growth in Emerging Asia to pick up in the second half of the year as the benefits of lower oil prices and loose monetary policy filter through to the domestic economy. Further ahead, a slowdown in credit growth and …
16th July 2015
With inflation still well above target, today’s decision by Bank Indonesia (BI) to leave its main policy rate on hold at 7.50% was no great surprise. While we think rates will stay on hold in the coming months, we expect to see a cut towards the end of …
14th July 2015
The marked contraction in Singapore’s economy in the second quarter is not, on its own, cause for great concern. However, the outlook for the domestic economy is clouded by the likely unwinding of a credit bubble that has developed over years of loose …
Property in both Hong Kong and Taiwan looks significantly overvalued. A slump in prices is one of the major risks for these economies over the coming year. … Property price bubbles a …
10th July 2015
Despite the weak economy, the Bank of Korea (BoK) kept its policy rate unchanged at a record low of 1.50% today. We think it will take a severe deterioration in the growth outlook to convince the BoK to cut rates again given concerns about household …
9th July 2015
The continued resilience of the labour market in June seems odd given the economic challenges that Australia is facing. As such, we expect that an easing in jobs growth and a rise in the unemployment rate in the second half of the year will play a part in …
Thailand has struggled with disappointing export growth over the past couple of years, with subdued global demand and real exchange rate appreciation only telling part of the story. Other factors such as the country’s exposure to slowing industries and …
8th July 2015
The Malaysian ringgit weakened past its 1998-2005 peg level of 3.80 against the dollar today for the first time since the peg was scrapped. Today’s decline may have been triggered by concern over the fallout from Greece’s referendum, along with local …
6th July 2015
Emerging Asia’s exports have continued to disappoint over recent months. The downturn can be explained partly by falling commodity prices and currency effects. However, weak global demand has also played a part. We expect export growth to start to recover …
3rd July 2015
The economic outlook for Emerging Asia over the next few years varies considerably from one country to the next. Years of loose monetary policy in the region’s wealthy economies have led to the emergence of asset bubbles, and these countries are likely to …
Most of Emerging Asia's PMIs for Emerging Asia fell back in June, suggesting the region's manufacturing sectors remain in the doldrums. In the two economies where the PMIs most closely track the hard data, the fall in manufacturing output now appears to …
1st July 2015
Although most Asian equities markets and currencies weakened in June, reflectingrising expectations that the US Fed will soon start to raise interest rates and thegrowing risk of Greece exiting the euro-zone, the moves were not dramatic. Whilewe think …
30th June 2015
The direct links between Emerging Asia and Greece are very limited. Exports to Greece account for only a tiny proportion of regional GDP, while banking sector ties are negligible. What matters more from an Asian perspective is not so much the crisis in …
The Malaysian ringgit has been Emerging Asia’s worst-performing major currency over the pastyear. While a weak ringgit should bolster Malaysia’s exports, it also poses a threat to financialstability. The danger of further depreciation is one reason why we …
26th June 2015
