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Most economies in Emerging Asia will benefit from falling oil prices. The big exception is Malaysia, where the government today revised its 2015 forecasts for the budget deficit, GDP growth and the current account surplus. While a collapse in the oil …
20th January 2015
Sharp falls in oil prices in recent months will put downward pressure on inflation across Emerging Asia, with a number of countries likely to see inflation turn negative in early 2015. On the whole, this is a welcome development. Falling oil prices will …
16th January 2015
The Bank of Korea (BoK) today left its policy rate on hold at 2.0%, and lowered its 2015 GDP growth and inflation forecasts. Although the forecast downgrades may fuel speculation about rate cuts, we think the economy is set to rebound in the coming …
15th January 2015
The recent sharp drop in global oil prices is a positive development for Emerging Asia. It will support growth in most economies and will put downward pressure on inflation, providing scope for monetary policy to be kept looser than would otherwise have …
14th January 2015
Problems in the euro-zone have been dragged back into the spotlight by the inconclusive recent presidential election in Greece. In general, Emerging Asia is well-placed to cope if the euro-zone does again fall back into crisis. That said , some of the …
9th January 2015
Opposition candidate Maithripala Sirisena has emerged victorious in Sri Lanka’s presidential election. Markets have responded favourably, perhaps not so much to the result itself as to encouraging signs that there will be a smooth transfer of power. …
The introduction of a Goods and Services Tax (GST) in April marks an important step towards strengthening Malaysia's public finances over the medium term. And while it will put upward pressure on inflation and reduce consumers' purchasing power, it is …
7th January 2015
The December PMIs for Emerging Asia were generally disappointing, suggesting that the region's manufacturing sectors continue to struggle. In the two economies where the PMIs most closely track the hard data, manufacturing output appears lacklustre, …
5th January 2015
Sri Lanka’s presidential election, scheduled for 8 th January, is shaping up to be much closer than expected, with the current president, Mahinda Rajapaksa, now facing a genuine challenge from Maithripala Sirisena, a defector from his own party. An …
24th December 2014
In this Weekly we outline our key calls for the region in 2015. We expect Emerging Asia to be a bright spot in the global economy, with growth set to accelerate in most economies. Falling commodity prices should put downward pressure on inflation, which …
19th December 2014
Emerging Asia’s financial markets have not escaped the latest turmoil unscathed, but they have fared better than other EM regions. … Rough end to the year for Asian …
18th December 2014
New Zealand's economy accelerated in Q3, despite monetary tightening earlier in the year. However, we are still expecting a slowdown in 2015 and see little chance of the Reserve Bank of New Zealand (RBNZ) hiking rates again in the next six months. … New …
Thailand's tourism sector, which was a key growth driver before the most recent political crisis, finally looks to be on the mend, and should add much-needed support to the economy going into 2015. That said, the pace of its recovery will be hampered by …
The Bank of Thailand (BoT) left interest rates unchanged at 2.0% today against the backdrop of gradual improvement in the economy. With price pressures benign, we think the BoT will look to keep monetary policy loose to support economic growth. … Thai …
17th December 2014
In our final Weekly of the year we will be outlining our key forecasts for 2015. But this week we take a look back at how we did in 2014. Our downbeat forecasts for growth largely played out, as did our view that inflation would stay low. But our record …
15th December 2014
Sri Lanka recorded another quarter of strong growth in Q3, with the economy expanding by 7.7% y/y, down only slightly from Q2. Looking ahead, a pick-up in private sector credit growth and robust external demand should help Sri Lanka maintain its position …
Rising levels of household debt suggest further rate cuts by the Bank of Korea, which today left interest rates on hold at 2.0%, are unlikely. In fact, with GDP growth set to accelerate in the coming months, we think the next move in rates is more likely …
11th December 2014
The Reserve Bank of New Zealand (RBNZ) kept its policy rate at 3.5% today and suggested rates will be left on hold for some time. We doubt the central bank will raise rates again before Q3 of next year. … New Zealand set for prolonged rate …
Most of Emerging Asia stands to benefit from lower oil prices, and in a couple of economies, Korea and Taiwan, we think the impact will be large enough to warrant an increase in our growth forecasts for next year. In those economies that run fuel subsidy …
5th December 2014
The Australian economy grew at its slowest rate since Q1 2013 in the third quarter, largely owing to a contraction in investment. We think falling commodity prices and a decline in mining investment will drag growth much lower than most analysts expect …
3rd December 2014
The Reserve Bank of Australia (RBA) provided no surprises in its monetary policy decision today, keeping its policy rate at 2.5% and once again signalling that it has no intention of changing its stance any time soon. We think the first rate hike is still …
2nd December 2014
Consumer price inflation in Indonesia rose sharply in November on the back of the recent hike in subsidised fuel prices. Inflation is likely to rise again in December and then remain elevated until late next year. … Indonesia CPI …
1st December 2014
The November PMIs for Emerging Asia suggest that the region's manufacturers continue to struggle. In the two economies where the PMIs most closely track the hard data, output appears to be stagnant at best. … Manufacturing PMIs …
Financial markets in Emerging Asia have on the whole had a fairly quiet month despite the recent Chinese rate cut and the expansion of the Bank of Japan’s programme of quantitative easing. … Limited impact from Chinese rate …
28th November 2014
We expect most economies in Emerging Asia to record another year of solid, if unspectacular, growth in 2015. That said , there are a number of potential upside surprises. This Weekly looks at some of the reasons why things might turn out better than we …
Asia’s manufacturing PMIs are closely watched as some of the most timely gauges of the region’s economic performance. In places such as China, Korea and Taiwan, we find that the PMIs are effective guides to trends in industrial output, inflation or …
The Philippines economy grew at its slowest pace in more than three years in the third quarter. However, a pick-up is likely over the coming quarters, as government spending recovers and exports continue to do well. The upshot is that the Philippines will …
27th November 2014
There has been a gradual recovery in retail spending in Emerging Asia during 2014. The top performing countries are Indonesia and Malaysia, where retail sales are expanding at a double digit pace. In contrast, retail spending in Thailand is falling in …
26th November 2014
Singapore's economy began to show signs of life in the third quarter, with manufacturing output picking up more than previously thought. The gradual recovery in the global economy and healthy real wages increases at home will both support growth over the …
25th November 2014
Sharp falls in global commodity prices have helped push inflation down across nearly all of Emerging Asia in recent months. However, while most countries in the region look set for a period of low inflation, deflation is not yet a serious threat. … How …
21st November 2014
Today’s 25 basis point rate hike by Bank Indonesia (BI) is a direct response to yesterday’s government decision to hike subsidised fuel prices. While we wouldn’t rule out the possibility of another rate hike over the next month or so, we doubt today’s …
18th November 2014
Australia signed a free trade agreement (FTA) with China yesterday that will give its exporters a surprising amount of access to China’s market. The biggest opportunities lie in the agriculture and services sectors, which in the long run could help the …
Today’s move by Indonesia’s new president to hike fuel prices is an encouraging first step on the road to reform. Although inflation is now likely to rise sharply, any spike should prove temporary, and we doubt the central bank will hike rates …
17th November 2014
The State Bank of Pakistan (SBP) cut its policy rate by 50bp to 9.5% over the weekend, having been encouraged by a recent drop in inflation. But with inflation set to rise again over the coming months, we doubt the central bank will see room to loosen …
Thailand's economy continued its lacklustre recovery in the third quarter, with growth picking up only slightly to 0.6% y/y from 0.4% the quarter before. Growth should accelerate further in the coming quarters, as fiscal stimulus kicks in and conditions …
The recently announced free-trade deal between Korea and China has generated plenty of optimistic headlines. However, we are sceptical the deal will have much impact, and it certainly isn’t going to provide a short-term solution to Korea’s recent export …
14th November 2014
Malaysia's economy slowed in the third quarter, with growth coming in at 5.6% y/y, down from a revised 6.5% the quarter before. We expect growth to slow further in the coming quarters, as the domestic economy feels the effects of fiscal tightening. … …
Bank Indonesia (BI) left interest rates on hold again today despite the ongoing weakness of the economy. A large current account deficit and an uncertain outlook for inflation mean rates are likely to remain on hold well into next year. … Bank Indonesia …
13th November 2014
The decision by the Bank of Korea (BoK) to leave interest rates on hold today at 2.0% comes despite the recent weakness of the Japanese yen against the won, which had led to some calls for more rate cuts. Currency concerns will linger, but we think the …
Some of the world’s fastest growing consumer markets over the next couple of decades are likely to be in Emerging Asia. Prospect are best in China, India and the Philippines, where rapid income growth should provide a boost to consumer spending. In …
12th November 2014
The latest increase in asset purchases by the Bank of Japan has caused another weakening of the yen, and created anxiety around the rest of Asia over rising competition from Japanese exports. Given the similarity of many of its exports to Japan's, Korea …
7th November 2014
Against a backdrop of softer domestic growth and weakening exports, the Malaysian central bank (BNM) unsurprisingly kept its policy rate on hold at 3.25% today. As the accompanying statement took on a more dovish tone, odds are that the policy rate will …
6th November 2014
A gain in employment in October, after two months of net job losses, will allay some of the worst fears about Australia's labour market, but it still looks far from healthy. … Australia Employment …
With the economic recovery still in the slow lane, the Bank of Thailand (BoT) unsurprisingly held its policy rate at 2.0% at its meeting today. As inflation is unlikely to emerge as a major policy concern in the near term, the BoT has scope to keep …
5th November 2014
Today’s GDP data for the third quarter showed that another fall in exports and a further slowdown in investment growth were the main factors behind Indonesia's economy expanding at its slowest pace in five years. The disappointing data help underline the …
The Reserve Bank of Australia (RBA) kept its policy rate on hold at 2.5% today and provided no surprises in its policy statement either. Once again it said that “the most prudent course is likely to be a period of stability in interest rates”, just as it …
4th November 2014
The October PMIs for Emerging Asia offered no signs that the region's disappointing manufacturing recovery is gaining any momentum. The most encouraging aspect of today's surveys was that they pointed to subdued price pressures, which should give central …
3rd November 2014
There are indications that the amount of spare capacity in the Newly Industrialised Economies (NIEs: Hong Kong, Singapore, Taiwan and Korea) is starting to be used up. As a result, while there is probably scope for growth in these economies to pick up a …
31st October 2014
Asia's financial markets have so far taken the end of QE3 largely in their stride. The performance of the region's currencies and equity markets has been fairly muted over the past month, while average bond yields have dipped. … Minimal impact from …
Taiwan’s economy picked up slightly last quarter, on the back of stronger exports, investment and public spending. Over the next year or so, we expect Taiwan’s economy to continue to record decent growth, which could open the way for interest rate hikes …
