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Inflation remains subdued across most of Asia, and we see little danger of it accelerating significantly any time soon. As such, we only expect rate hikes in a few economies before the end of 2014 . … Asian inflation likely to stay …
18th August 2014
Malaysia's economy accelerated for the fifth straight quarter in Q2, supported by strong export growth. Although Malaysia’s headline growth rate is likely to drop off in the second half of the year as monetary conditions tighten, fiscal consolidation …
15th August 2014
Today’s interest rate cut by the Bank of Korea (BoK) is unlikely to mark the start of a prolonged period of policy easing. In fact, with growth likely to bounce back strongly in the second half of the year on increased government spending and faster …
14th August 2014
Today’s industrial production and inflation data for India were a disappointment. The slowdown in industrial production growth cast doubt on the recent recovery of the sector, while the sharp rise in inflation could make it difficult for the central bank …
12th August 2014
A sharp slowdown in the Korean economy last quarter and dovish rhetoric from the central bank has raised expectations that interest rates will be cut at Thursday’s scheduled policy meeting. With the economy likely to rebound strongly in the second half of …
11th August 2014
EM assets sold off sharply last year after the US Fed hinted that QE was on borrowed time, with some of Asia's major economies getting caught up in the turmoil. Markets have become jittery again in the last week, at least partly because of speculation …
8th August 2014
The Bank of Thailand (BoT) unsurprisingly held its policy rate at 2.0% at its meeting today amid an improving growth outlook. But as the economy may take some time to achieve a sustained recovery, we expect the BoT to keep monetary policy unchanged for …
6th August 2014
The Reserve Bank of India (RBI) left its policy rates on hold today, as expected, but with inflation on a downward trend there should be scope for the RBI to cut rates sooner than most analysts expect. … Indian rates could be cut sooner than …
5th August 2014
A breakdown of today’s GDP data show weak domestic demand as the main factor responsible for the slowdown in Indonesia’s economy last quarter. The disappointing figures act as a timely reminder of the scale of the challenge facing Joko Widodo as he …
The Reserve Bank of Australia (RBA) kept its policy rate on hold at 2.5% again today, and reiterated in its statement that it does not expect to make any rate changes in the near term. We think the policy rate is likely to stay unchanged for the …
Emerging Asia’s consumers have been struggling in recent months. Tight labour markets and improving growth prospects point to some pick-up going forward, but high levels of household debt in a number of economies, coupled with monetary tightening, will …
4th August 2014
The July PMIs for Emerging Asia show that the region's manufacturing sectors generally fared well over the past month. Encouragingly, rising new orders suggests the recovery has further to run. … July PMIs point to strengthening …
1st August 2014
The central bank in the Philippines (BSP) hiked its main policy rate earlier today for the first time in over three years in a further attempt to reduce risks in the financial sector and clamp down on rising inflation. We believe further tightening is …
31st July 2014
Most of the region's currencies and equity markets fared well over the past month. In particular, Joko Widodo's presidential election victory in July helped Indonesia's financial markets stage a rebound after a weak showing in June. … Indonesia's …
Taiwan’s economy continued to gain momentum last quarter, largely owing to a rebound in investment. Over the next year or so, we expect Taiwan’s economy to continue to record decent growth, supported by a combination of strong exports and loose monetary …
The central banks of New Zealand, the Philippines and Malaysia all tightened monetary policy last month amid signs that policymakers are becoming increasingly concerned that loose monetary policy is helping to fuel asset bubbles, especially in the …
30th July 2014
Financial markets have welcomed the election of Joko Widodo as Indonesia’s president, but there is still great uncertainty over his policy priorities and his ability to push through his own agenda. Mr Widodo’s stance on how to reform the country’s …
28th July 2014
Despite the sharp Q2 slowdown in Korea, today’s government stimulus package should lead to anacceleration in growth in the second half of the year, putting the economy on schedule to meet ourforecast of 3.5% for the full year. … Korean growth to …
24th July 2014
The Reserve Bank of New Zealand (RBNZ) raised its policy rate by 25bp for the fourth straight meeting today, but signalled that it may now stay on hold for a while. We still expect one more rate hike by the end of the year. However, the RBNZ will want to …
GDP growth in Korea eased in the second quarter of the year, mainly due to a fall in consumer spending and investment. Although recent economic weakness has reignited talk of a possible rate cut, we expect some improvement in growth over the rest of the …
The new government’s emphatic election victory in May has lifted some of the gloom that has hung over India’s economy in recent years. We see a number of ways in which the country’s new leaders can make a difference. While there is only limited scope for …
23rd July 2014
The uncertainty surrounding Indonesia’s presidential election looks set to continue after Prabowo Subianto , who looks to have lost the election to Joko Widodo , refused to accept today’s results from the election commission. Although it looks …
22nd July 2014
As one of the region's few net commodity exporters, there are some concerns that Malaysia is vulnerable to a fall in commodity prices. But Malaysia is not as dependent on commodities as is often thought. In fact, stronger demand for manufacturing exports …
18th July 2014
Inflation in India appears finally to be edging in the right direction, making it increasingly likely that the Reserve Bank (RBI) will cut interest rates sooner than most currently anticipate. … Slowing Indian inflation brings rate cuts back onto …
14th July 2014
Today’s GDP data showed that Singapore's economy contracted in the second quarter of the year. Although we expect some rebound over the rest of 2014, helped by recovering export demand from advanced economies, structural constraints will hold the economy …
Singapore’s manufacturing exports have been a consistent weak point in the economy over recent years. A recovery in global demand should help, but the problems are more than cyclical. In fact, the waning importance of manufacturing is likely to be a theme …
India’s new government took a more hawkish line than expected in its budget today, committing to a further sizeable reduction in the budget deficit that will weigh on growth. Some will be disappointed at the absence of detail on structural reform. But …
10th July 2014
Amid rising concerns over the stability of the financial sector, Malaysia’s central bank (BNM) today hiked its policy rate for the first time in three years. With the economy in good shape, we see scope for another hike by the end of the year. … More rate …
Bank Indonesia’s (BI) decision to leave interest rates on hold today never really looked in much doubt. Looking ahead, although the central bank may have some scope to cut interest rates over the next year or so, loosening, when it does arrive, is likely …
Interest rates in Korea were left on hold today, and with inflation set to stay subdued we expect monetary policy to remain unchanged for the rest of the year. … Bank of Korea in no rush to hike interest …
Joko Widodo looks to have won today’s presidential election in Indonesia, and hopes are high that he will make a fresh start on economic reform. However, the constraints of coalition politics, as well as a lack of experience on the national stage, …
9th July 2014
Thailand's economy appears to be on the road to recovery following the military coup on 22 nd May. But challenges remain and we expect the economy to grow at less than its trend rate for a while yet. … Thailand is showing signs of post-crisis …
The recovery in demand for Emerging Asia’s exports is unlikely to have run its course by 2016. However, with the Fed’s tightening cycle likely to be gathering pace, credit growth cooling and structural constraints starting to bite in some places, there …
8th July 2014
Indonesia’s presidential election on Wednesday could have a crucial bearing on the future of the country’s economy. Financial markets would favour a victory for Joko Widodo, the current mayor of Jakarta, and would almost certainly take a turn for the …
7th July 2014
Most countries in Emerging Asia should record reasonable growth over the next couple of years, helped by a combination of supportive monetary policy and a pick-up in demand from advanced economies. That said, it is unlikely to be all plain sailing. …
4th July 2014
The June PMIs for Emerging Asia continue to point towards a slow and uneven recovery. Softening new orders are a reminder that a strong rebound is unlikely to materialise any time soon. … June PMIs point to sluggish …
1st July 2014
The Reserve Bank of Australia (RBA) left its policy rate at 2.5% today, and again made it clear that there will not be any changes in the near term. In fact, with mining investment set to fall and the broader economy struggling, we expect rates to be kept …
Reduced political tensions in Thailand have boosted its stock market and the baht. But in Indonesia, growing uncertainty over the result of July’s presidential election has weighed on financial markets. … Thailand’s financial markets recover, while …
30th June 2014
Korea has some of the worst demographic dynamics in Emerging Asia. Not only is the population set to age dramatically, but the size of the overall workforce is also set to fall sharply. Although the government is trying to boost the size of the workforce …
Today’s GDP data show the crisis in Vietnam’s banking sector is continuing to hold back the economy. With the authorities making slow progress in cleaning up the banks, we expect the woes of the financial sector to continue to weigh heavily on the economy …
27th June 2014
Taiwan’s central bank (CBC) today left interest rates on hold, but introduced a series of measures to try and cool property prices. Looking ahead, we believe the central bank will continue to tackle risks in the property sector through the use of …
26th June 2014
An easing of financial conditions across the global economy has given support to most currencies in Emerging Asia, which have generally been appreciating against the US dollar over the past few months. The big exception to this is the Indonesian rupiah, …
25th June 2014
A sharp rise in oil prices as a result of the crisis in Iraq would have negative effects on Emerging Asia. While the inflationary impact is likely to be manageable, most Asian economies are net importers and relatively heavy users of oil. Countries that …
24th June 2014
Diesel subsidies in India have burned a sizeable hole in the government’s pocket over the past few years. But the stage appears to be set for a full deregulation of diesel prices in the coming months, which would eliminate diesel subsidies once and for …
23rd June 2014
The central bank in the Philippines (BSP) today tightened monetary policy again in an attempt to reduce risks in the financial sector and clamp down on rising inflation. We think further tightening is likely over the next year or so. … Further …
19th June 2014
New Zealand’s economy posted another robust quarter of growth in Q1, led by strong residential investment. There are signs that the economy is already cooling in response to policy tightening, but growth still looks set to come in comfortably above trend …
The Bank of Thailand (BoT) unsurprisingly kept its policy rate on hold at 2.0% today amid signs that the worst effects of the political crisis on the economy are probably over. Provided the economy makes at least a gradual recovery over the rest of the …
18th June 2014
Sri Lanka’s economy started 2014 on a strong note, and looks set to remain among Asia’s fastest growing economies this year. Unfavourable weather conditions are a potential risk, but the strengthening external sector will provide an important support to …
16th June 2014
Today’s data show that wholesale price inflation in India increased sharply in May, denting the optimism stemming from the decrease in consumer price inflation in the same month. … Indian wholesale inflation spikes, but should ease …
In recent decades Emerging Asia has consistently set the global benchmark for economic growth. In this Weekly we look at prospects for the next decade. Overall, while Emerging Asia should continue to outperform, growth is likely to be pulled down by less …
