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Indonesia recorded another quarter of relatively weak growth in Q3, with GDP expanding by just 4.7% y/y, well below the 5.8% average recorded over the past decade. With tight monetary policy and low commodity prices likely to remain a drag on the economy, …
5th November 2015
With the economy starting to show some tentative signs of recovery, the Bank of Thailand (BoT) decided to leave interest rates on hold at 1.50% today. Looking ahead, with inflation likely to remain low and the economy set for only a very gradual recovery, …
4th November 2015
Emerging Asia's PMIs remained lacklustre in October, but in the three economies where the PMIs most closely track the hard data, the surveys suggest that manufacturing conditions are at least stabilising. … Manufacturing PMIs …
2nd November 2015
Credit growth has continued to weaken in most of the countries which we have previously highlighted as being most at risk of a crisis. The two exceptions are China and Vietnam. Although an acceleration in credit growth should provide a boost to GDP growth …
30th October 2015
Taiwan’s GDP contracted in the third quarter, due mainly to weakness in exports. Looking ahead, we expect growth to recover soon. Exports should pick up off the back of a recovery in global demand, while the outlook for domestic demand is also positive. …
Financial markets in Asia have fallen back following the US Fed’s monetary policy statement on Wednesday, which struck a more hawkish tone than many had expected. Despite the most recent falls, almost all the region’s currencies and equity markets have …
29th October 2015
A slumping currency, down by a fifth since the start of the year, a dreadful business environment, and an uncertain security situation are some of the challenges facing Myanmar as it prepares to go to the polls next month. Resolving these problems is the …
Fossil fuels should continue to be the world’s most important energy source for the foreseeable future. However, renewable energy production will grow rapidly and become an increasingly large part of global energy production. Coal is likely to be more …
27th October 2015
The Malaysian government remains committed to keeping the budget deficit in check, despite the fall in oil prices which has hit fiscal revenues hard. This has left the government with little scope to boost spending and support growth. … Malaysia’s …
26th October 2015
Figures due to be released over the coming week are likely to show that growth in Taiwan slowed sharply last quarter. However, with prospects for exports improving and domestic demand likely to remain robust, we think growth will start to recover soon. An …
23rd October 2015
Korea's economy rebounded in the third quarter as the impact of the negative shock caused by the outbreak of Middle East Respiratory Syndrome (MERS) in mid-2015 faded. We expect the recovery to continue in the coming quarters, helped by supportive …
The central bank in Sri Lanka (CBSL) today kept its deposit and lending rates unchanged at 6.0% and 7.5%, respectively, despite headline inflation having been negative for the last three months. This reflects concerns about the external position …
20th October 2015
The latest warnings that deflation is a major cause for concern in Emerging Asia are wide of the mark. In fact, we think inflation will be back in positive territory across the entire region by early 2016. Moreover, the recent bout of deflation has done …
16th October 2015
The recent rebound in the rupiah was never likely to be enough to persuade Bank Indonesia (BI) to loosen policy, and today’s decision to leave interest rates on hold at 7.5% was no great surprise. However, in a marked change in rhetoic, the central bank …
15th October 2015
Against a backdrop of gradual recovery in the domestic economy, the Bank of Korea (BoK) left its policy rate unchanged at a record low of 1.50% today. We expect the BoK to keep rates on hold for the rest of 2015 and through 2016. … Bank of Korea to keep …
The Monetary Authority of Singapore (MAS) today opted to “reduce slightly” the slope of its target band for the nominal effective exchange rate (NEER), which amounts to very modest loosening of its policy stance. The MAS does not appear to be overly …
14th October 2015
Malaysia faces a number of challenges over the coming years, not least in adjusting to lower commodity prices. But there are reasons to think the economy will hold up relatively well and, while it is difficult to rule out periodic sell-offs, we think the …
13th October 2015
The jump in Egyptian inflation to 9.2% y/y in September was driven almost entirely by a rise in the volatile food component. While we do expect inflation to fall back again, last month’s data mean an interest rate cut at the next MPC meeting now looks …
12th October 2015
The rebound in the Indonesian rupiah over the past week is unlikely to be enough to persuade Bank Indonesia to cut interest rates at its meeting on Thursday. But provided the recent rally does not go into reverse over the next couple of months, we see …
9th October 2015
Korea’s domestic economy appears to be getting back on its feet following the negative shock caused by the outbreak of Middle East Respiratory Syndrome (MERS) in mid-2015. With the outlook improving, further rate cuts by the Bank of Korea are unlikely. … …
7th October 2015
Singapore should emerge from its recent bout of deflation toward the end of the year. Given this, we think that the Monetary Authority of Singapore (MAS) will opt against loosening policy at its bi-annual meeting, due to be held within the next two weeks. …
2nd October 2015
Emerging Asia's PMIs remained weak in September, but in the three economies where the PMIs most closely track the hard data, the surveys suggest that manufacturing conditions may be slowly turning a corner. … Manufacturing PMIs …
1st October 2015
Although the China-led panic that swept through Asian markets in August has subsided over the past month, most of the region’s currencies and equity markets still recorded losses. Investor sentiment toward the region is unlikely to improve until there are …
30th September 2015
Vietnam’s economy recorded another quarter of healthy growth in Q3, and stands out as one of the few countries in the region that has shrugged off the global slowdown in trade. We expect it to remain a bright spot over the next few years. … Vietnam GDP …
29th September 2015
At a time when growth in most of Emerging Asia is slowing, Vietnam stands out as one of the region’s few bright spots. Although we expect the country’s strong performance to continue over the next couple of years, further reforms are needed if Vietnam is …
25th September 2015
A sharp slowdown in growth and very weak price pressures were the two key factors behind the decision of Taiwan’s central bank (CBC) to cut interest rates by 12.5 basis points to 1.75% at its meeting today. Looking ahead, with growth likely to recover and …
24th September 2015
Economic growth across large parts of Emerging Asia has slowed over the past couple of years. One important exception to this trend is the Philippines, where a strong recent performance has raised hopes that it could be on the cusp of sustained annual …
23rd September 2015
The Indonesian rupiah has fallen again over the past week, hitting a fresh 17-year low against the US dollar. The sharp drop in the currency, which is down by a cumulative 33% since the start of 2013, has once again invited comparisons with the Asian …
After a disappointing first ten months to Joko Widodo’s presidency, there are encouraging signs that policymaking in Indonesia is finally starting to improve. However, we will need to see further evidence of reform before we start raising our forecasts. … …
18th September 2015
With the Fed possibly poised to hike interest rates later in the day, Bank Indonesia’s (BI) decision to keep its key policy rate on hold at 7.5% was no great surprise. Going forward, with inflation set to drop back sharply later in the year, we expect to …
17th September 2015
We would be wary of reading too much into today’s GDP figures from Sri Lanka,which suggest the economy accelerated sharply in the second quarter. The country’s statistical office has recently rebased its GDP statistics, which are still in the process of …
16th September 2015
The Bank of Thailand (BoT) kept its policy rate on hold at 1.5% today, undoubtedly with an eye on the US Fed’s rate meeting this week. But with the economy still in deflation and struggling for momentum, we think it is too soon to rule out a further rate …
The first rate hike in the US looks set to take place sooner rather than later. But local factors, not theactions of the US Federal Reserve, will determine the next moves by Asia’s central banks. … Will Asia follow the …
15th September 2015
The State Bank of Pakistan (SBP) responded to the latest fall in headline inflation by cutting interest rates again over the weekend. The SBP’s aggressive series of rate cuts during the last year poses a serious risk to the medium-term inflation outlook, …
14th September 2015
The slump in commodity prices accounts for most of the decline in Asian exports this year, even in countries which are not major commodity exporters. … Why have exports been so …
11th September 2015
The decision to keep interest rates on hold today at 3.25% reflects the difficult balancing act facing the Malaysian central bank (BNM) as it continues to grapple with the problems caused by slowing growth, a weakening currency and high levels of foreign …
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 …
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 …
