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Poor infrastructure is likely to remain a key constraint on economic development across large parts of Emerging Asia over the next decade. For all the headlines, the Asian Infrastructure Investment Bank (AIIB) is only likely to provide a small part of the …
3rd April 2015
The PMIs for Emerging Asia fell back in March, underlining the fragility of the region's manufacturing recovery. Indeed, in the two economies where the PMIs most closely track the hard data, manufacturing output now appears to be stagnant. … …
2nd April 2015
Most equity markets and currencies in Emerging Asia fell last month, although in the majority of cases the declines were relatively small. … Currencies and equity markets drop …
1st April 2015
Policymakers in Indonesia should welcome, rather than fear, a weaker rupiah. Not only is foreign currency debt relatively low, but there is little sign that a fall in the currency is pushing up inflation. What’s more, a weaker currency should provide a …
31st March 2015
Although credit growth in Thailand has cooled over the past few years, the process of deflating the country’s credit bubble is still far from over. Given this, the Bank of Thailand’s decision earlier this month to cut interest rates suggests it may not be …
27th March 2015
Vietnam’s economy grew strongly in the first quarter of the year, thanks mainly to robust growth in the manufacturing sector. We are raising our growth forecast for this year to reflect the improving prospects for the economy. … Vietnam GDP …
26th March 2015
Currency strength in Emerging Asia has been a factor in the region's recent wave of policy loosening. It appears to be undermining export competitiveness and has helped push inflation down further. Concerns about export competitiveness, at least, will …
25th March 2015
Emerging Asia’s exports have taken a turn for the worse in recent months. Leaving out China, the region’s merchandise exports, measured in US dollar terms, contracted at the sharpest annual rate in two years in January. So far six economies have released …
24th March 2015
Despite slowing growth, a bout of deflation and a housing market that has recently taken a turn for the worse, Taiwan is unlikely to join the Asian rate-cutting cycle at its upcoming meeting. … Taiwan is unlikely to join Asia's rate-cutting …
23rd March 2015
The first rate hike in the US looks to be only a matter of months away. But local factors, not the actions of the US Federal Reserve, will determine the next moves by Asia's central banks. … Asia does not need to follow the Fed's …
19th March 2015
Having surprised markets last month with a rate cut, Bank Indonesia (BI) left its key policy rate on hold today at 7.50%. Although we expect to see further rate cuts this year, the pace of easing is likely to be gradual. … Indonesia leaves rates on hold, …
17th March 2015
The weakness of the Indonesian rupiah is unlikely to kick-start a recovery in the country’s non-commodity export sector. For one thing, it has not left Indonesian exporters looking any more competitive. Meanwhile, a dilapidated infrastructure and onerous …
13th March 2015
We have been warning for some time that parts of Asia are experiencing an unsustainable credit binge, and that credit growth will need to slow for a crisis to be avoided. Encouragingly, credit growth has been slowing recently in China, Hong Kong, …
12th March 2015
The Bank of Korea (BoK) reduced its policy rate by 25 basis points to 1.75% today, adding to a growing list of central banks that have cut rates this year. But Korea's high household debt levels, coupled with the recent acceleration in household credit …
The Bank of Thailand (BoT) joined the global shift toward monetary loosening today, cutting its policy rate by 25bp to 1.75%. Looking ahead, we think the BoT will keep rates on hold in the coming months as it monitors the impact on the economy of the …
11th March 2015
Taiwan’s Financial Supervisory Commission caused a stir recently when it warned of the rising risk of a property price crash. Although the economy is unlikely to escape unscathed if property prices did collapse, we doubt the broader impact would be too …
6th March 2015
Consumer price inflation in the Philippines picked up slightly in February, but remains comfortably towards the lower end of the central bank’s (BSP) target range. Although we expect inflation to rise over the coming year, the increase will be gradual, …
5th March 2015
Despite a recent drop in inflation, the Malaysian central bank (BNM) kept its policy rate on hold at 3.25% today. While several central banks in the region have eased monetary policy this year, we expect interest rates in Malaysia will remain on hold …
The February PMIs for Emerging Asia were generally encouraging, suggesting that the region's manufacturing conditions are slowly gaining a firmer footing. In the two economies where the PMIs most closely track the hard data, manufacturing output appears …
2nd March 2015
We see little prospect of an improvement in Indonesia’s current account over the next couple of years. This could leave the rupiah vulnerable when the Fed starts to tighten policy later this year, probably sometime in the summer. … Where next for …
27th February 2015
Equity markets in Emerging Asia recorded another month of solid gains in February. Currencies did not fare as well, particularly the Indonesian rupiah, which has continued to weaken against the US dollar. … Asian equity markets continue good …
A tight labour market in Taiwan is feeding through to stronger wage growth, which in turn is providing a boost to household consumption. The improving prospects for the consumer sector are a key reason to expect Taiwan to perform strongly this year. … …
26th February 2015
Emerging Asia has seen a sharp drop in inflationary pressures over the past few months. Taiwan, Singapore and Thailand are now experiencing deflation, while inflation is 1% y/y or below in Malaysia, Korea, and Vietnam. Only in Indonesia is inflation …
25th February 2015
Consumer price inflation in Vietnam slowed again in February, and looks set to remain very low for the coming year. With the economy still overwhelmingly dependent on exports for growth, another rate cut is likely soon. … Vietnam CPI …
24th February 2015
The latest GDP figures for Emerging Asia show regional growth was broadly flat again last quarter. Looking ahead, a strong pick-up looks unlikely. But with monetary policy set to remain loose and oil prices likely to stay low, we expect most countries to …
18th February 2015
With inflation set to stay elevated until the end of the year and the current account deficit likely to remain a source of vulnerability, today’s rate cut by Bank Indonesia is unlikely to signal the start of an aggressive series of rate cuts. … Aggressive …
17th February 2015
The Bank of Korea (BoK) today left its policy rate on hold at 2.0% after the government softened its pressure for further loosening. Looking ahead, we think persistent concerns about high household debt levels, coupled with a pick up in growth in the …
Singapore's economy picked up in the fourth quarter, despite a contraction in the manufacturing sector. Lower oil prices will help Singapore's economy in 2015, but slowing credit growth will keep growth shackled. … Singapore GDP (Q4 …
Thailand's economy continued to gain momentum in the fourth quarter, with growth picking up to 2.3% y/y from 0.6% the quarter before. The Thai economy should gain a firmer footing in the coming quarters, but growth is still likely to disappoint by past …
16th February 2015
Korea’s housing market is showing signs of recovery, supported by the fall in stocks of unsold homes, rising rents, low interest rates and supportive government policies. A stronger housing market should provide a boost to growth over the next couple of …
13th February 2015
Despite the recent drop in inflation, the central bank in the Philippines is unlikely to join a number of other central banks in the region that have loosened monetary policy since the start of the year. … Philippines unlikely to join Asian rate cutting …
12th February 2015
Malaysia's growth picked up to 5.8% y/y in the fourth quarter, compared with 5.6% the quarter before. However, this acceleration will likely prove short-lived as lower oil prices will be a major headwind for the economy this year. … Malaysia GDP …
There has been a clear shift towards looser monetary policy around the world since late 2014, and several Asian central banks have been part of the trend. Any further moves over the coming months are likely to be in the direction of looser policy, but …
6th February 2015
Indonesia today reported another quarter of weak GDP growth. The figures underline that the country’s new president, Joko Widodo, faces a tough challenge to reinvigorate the economy, despite a promising first 100 days in office. … Indonesia GDP …
5th February 2015
The Reserve Bank of Australia (RBA) cut its cash rate for the first time since mid-2013 today, taking it down by 25 basis points to 2.25%. Given the RBA’s change of stance and the likelihood that the economy will slow this year, more loosening is likely …
3rd February 2015
The January PMIs for Emerging Asia showed some signs of improvement, suggesting that the region's manufacturing sectors started 2015 on a slightly better note. In the two economies where the PMIs most closely track the hard data, manufacturing output …
2nd February 2015
Emerging Asian equity markets have got off to a strong start to the year, while the performance of Asian currencies has been much more mixed. … Asian equity markets make winning start to …
30th January 2015
Korea stands to be one of Emerging Asia’s biggest beneficiaries from lower oil prices, and will also be boosted by a recovery in the housing market and by expansionary fiscal policy. We think most forecasters are now being too pessimistic about the …
The labour market continues to tighten, as the economic recovery is picking up speed. However, the continued slowdown in inflation suggests that the Bank of Japan still has more work to do. … Taiwan GDP …
Expectations that the fall in oil prices will trigger a wave of interest rate cuts across Asia are probably wide of the mark. Admittedly, Pakistan, India and Singapore have each loosened monetary policy this month. In each case though, loosening had …
29th January 2015
The Philippines economy picked up strongly last quarter, largely owing to a rebound in government spending. We expect growth to remain strong in 2015, supported by recent improvements to the business environment, low interest rates and a healthy export …
The Reserve Bank of New Zealand (RBNZ) kept its policy rate at 3.5% today and suggested there is now far less certainty its next move will be a hike. We are not expecting any changes in 2015 or 2016. … New Zealand's central bank takes a more neutral …
The Malaysian central bank (BNM) unsurprisingly kept its policy rate on hold at 3.25% today, and is unlikely to make any changes during the rest of this year. There are some concerns about the pace of economic growth, but inflation has not dropped …
28th January 2015
The Bank of Thailand (BoT) left interest rates unchanged at 2.0% today despite the recent drop in inflation. While dissent within the monetary policy committee has raised the odds of a rate cut, we think the central bank will want to monitor the impact on …
Indonesia’s new president, Joko Widodo (known as Jokowi) has made an encouraging start to hispresidency. But tougher challenges lie ahead, while a corruption scandal is raising questions about hisability to assert his authority and threatening to tarnish …
In an unscheduled decision, the Monetary Authority of Singapore (MAS) today loosened monetary policy by reducing the slope of its target band for the nominal effective exchange rate (NEER). The change was made in response to the recent drop in inflation. …
The State Bank of Pakistan (SBP) cut its policy rate by 100bp to 8.5%, the lowest since 2005, over the weekend. Although inflation and money supply growth have both slowed sharply in recent months, we doubt the central bank will see scope to cut further. …
26th January 2015
The decision by the Swiss National Bank (SNB) to abandon its exchange rate ceiling has created questions about the sustainability of other currency regimes. We think there is little chance of the Monetary Authority of Singapore (MAS) overhauling its …
23rd January 2015
Today's advance estimate suggests Korea's economy ended 2014 on a soft note, with growth slowing to a seasonally-adjusted 0.4% q/q in Q4 from 0.9% the quarter before. However, growth should rebound in the coming quarters, supported by expansionary fiscal …
The recent drop in oil prices is not the only reason to think that consumer price inflation will remain low in New Zealand over the next couple of years. Domestic price pressures are also fading. We now expect the Reserve Bank of New Zealand (RBNZ) to …
21st January 2015
