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Today’s figures on Indian industry were the most positive in many months. These data are volatile though and don’t yet provide convincing evidence that the sector has finally turned a corner. Meanwhile, consumer price inflation remains high. … Indian …
12th June 2014
Although recent political violence in Pakistan has once again put the country’s poor security situation under the spotlight, it is far from the only problem the country faces. We expect growth in Pakistan to remain shackled. … Pakistan’s security …
The Bank of Korea (BoK) kept interest rates on hold today, as was expected given the reasonable economic outlook and subdued inflation. We think rates will be kept on hold for a while yet, with the first rate hike unlikely to be until next year. … Low …
The Reserve Bank of New Zealand (RBNZ) raised its policy rate by 25bp for the third straight meeting today, as it continued the process of returning rates to more normal levels. We doubt that a downturn in the housing market will prevent the RBNZ from …
The rapid rise in household debt levels coupled with strong house price growth is a key medium-term threat to Malaysia. With the economy now in good shape, the central bank (BNM) has scope to act pre-emptively to contain financial stability risks. We …
11th June 2014
We have been arguing for some time that Emerging Asia’s credit binge is unsustainable. While we don’t think an Asia-wide financial crisis is likely, the countries that have seen the biggest build-up in credit growth over the past few years are unlikely to …
10th June 2014
A strong manufacturing sector would go some way to reviving the economic fortunes of India and Indonesia. The challenges are formidable. But, with a new prime minister in India, and Indonesia set to elect a new president in July, prospects may be better …
9th June 2014
Since assuming power, the army has made spurring the flagging Thai economy one of its top priorities. Public spending should receive a boost, but private sector expenditure is likely to remain subdued until there are clearer signs of political stability. …
5th June 2014
Australia’s economy posted strong growth in Q1, on the back of a surge in net exports. However, it is still far too early to say that the mining slowdown has been successfully navigated. Indeed, the landscape has already changed for the worse since the …
4th June 2014
The central bank left interest rates unchanged today, as expected. Looking ahead, rate cuts are unlikely any time soon despite subpar economic growth as consumer price inflation remains high. … Rate cuts unlikely any time soon in …
3rd June 2014
The Reserve Bank of Australia (RBA) left its policy rate unchanged at 2.5% today, and once again said that it does not expect to make any changes in the near term. Given that the economy is likely to slow over the coming quarters, we still think a rate …
The May PMIs for Emerging Asia were a mixed bag. However, solid new orders suggest Asia's manufacturing sectors should at least continue grinding out steady growth. … May PMIs point to slow-going …
2nd June 2014
The slowdown in GDP growth in South East Asia in recent quarters represents something of a fall from grace for the region, which until recently was a rare bright spot in the global economy. With the political crisis in Thailand no closer to resolution, …
The election of Narendra Modi in India has provided a boost to the rupee and the Indian stock market. In contrast, the military coup in Thailand and anti-China protests in Vietnam have weighed on financial markets in those countries. … Emerging Asia …
30th May 2014
Today’s GDP data confirm that India’s economic growth was very subdued at the start of the year. There will be a temptation to see this as essentially old news given how much the landscape has changed since the election. But the latest figures should be a …
Political developments have once again taken centre stage over the past month. Most attention has focused on Thailand, where the army has staged a military coup. This may help to reduce uncertainty in the near-term, but it brings a lasting resolution of …
29th May 2014
GDP growth in the Philippines slowed in Q1, but the breakdown of the data was more encouraging than the headline numbers. The outlook remains upbeat. We expect a rebound over the coming quarters, which would ensure the Philippines remains one of the …
India’s current account deficit fell to its lowest level in five years last quarter. Looking ahead, the deficit looks set to widen as imports are likely to rise on the back of an economic recovery and a recent easing of gold import curbs. Nonetheless, any …
27th May 2014
Thailand's protracted political crisis has damaged the domestic economy, but there are few signs of contagion to the rest of the region. Some of its neighbours may even stand to benefit. … Thailand's political crisis won't hurt the rest of the …
26th May 2014
Urbanisation has been an important growth driver for Asian economies over the past few decades. With the proportion of the population living in urban areas still below 50% in many Asian countries, this process still has much further to run. However, the …
Recovery in advanced economies has been underway for the best part of a year now, but Emerging Asia’s exports have remained sluggish. Some commentators are concerned this is more than a short-term problem. However, Emerging Asia’s exports still look …
Thailand’s coup should reduce uncertainty in the near term and so may well be welcomed by financial markets. But it brings lasting resolution of the political conflict no closer and further undermines the development of the effective institutions that …
22nd May 2014
With India’s economy set to benefit from the stability provided by the first single-party majority government since the 1980s, an influx of foreign investment should push the rupee higher against the US dollar. While some commentators expect the central …
21st May 2014
Contrary to some of the initial commentary, we are not convinced that the military’s imposition of martial law has brought resolution of Thailand’s political crisis any closer. There are a number of scenarios for how the crisis may now evolve but …
Today’s GDP data showed that Singapore's economy started the year better than previously thought. Recovering demand from advanced economies should support growth for the rest of 2014. … External outlook upbeat for …
20th May 2014
Prolonged political uncertainty in Thailand has clearly taken a heavy toll on the economy, which contracted in the first quarter of the year. Unless a resolution to the political crisis is found soon, GDP growth in the second quarter may not be much …
19th May 2014
The surge in credit that has been going on across much of Emerging Asia since the global financial crisis has been getting some well-deserved media attention recently. But while we have been flagging up concerns in a number of economies for some time now, …
For the first time in 30 years, it appears that a national government in India will be free from the chains of coalition politics, giving it a strong platform from which to launch much-needed economic policy reforms. It remains to be seen how much …
16th May 2014
Malaysia’s growth picked up strongly in the first quarter of 2014, reinforcing our view that the central bank (BNM) is likely to begin raising its policy rate at its next meeting in July. Although domestic demand is likely to make a weaker contribution to …
India’s wholesale price inflation dipped unexpectedly last month, but this is unlikely to persuade the Reserve Bank of India (RBI) to abandon its hawkish stance on monetary policy any time soon. … India’s wholesale inflation eases, but RBI unlikely to …
15th May 2014
Australia's budget included a range of measures to rein in the fiscal deficit. The shift to tighter fiscal policy comes at a time when the economy is growing below trend and is facing a sharp fall in mining investment. It is another reason to expect …
14th May 2014
As voting in India’s general election draws to a close today, another batch of disappointing data has underlined the economic challenges that will face the new government. … India’s next government forced to build on sluggish …
12th May 2014
Fears that a strong won will undermine Korea’s export competitiveness look overdone. If anything, the won looks slightly undervalued, while prospects for the country’s exporters are better than they have been for some time. … Is the Korean won …
All eyes will be on India next week as its much-talked-about election comes to an end. Opinion polls have consistently suggested that the opposition BJP party, which has nominated Narendra Modi as its candidate for prime minister, will secure the most …
With the economic recovery gaining momentum, but inflationary pressures still low, the Bank of Korea’s (BoK) decision to keep interest rates on hold came as no surprise. We think interest rates will be left on hold until next year. … Rates in Korea to …
9th May 2014
Malaysia’s central bank (BNM) opted to keep its policy rate at 3.0% today, but the case for monetary tightening is building, and we think BNM could hike rates as early as its next meeting in July. … Malaysia on the verge of tightening monetary …
8th May 2014
The central bank in the Philippines (BSP) left interest rates on hold today but hiked the reserve requirement ratio (RRR) by a further 100 basis points, as it looks to reduce rising risks in the financial sector. Further tightening is likely in the coming …
India's high dependence on rainfall for crop production makes it particularly vulnerable to the dry El Niño weather conditions that many weather forecasters expect this year. Concerns over the possibility of higher food inflation have risen as a result. …
7th May 2014
Thailand’s political crisis is approaching a critical stage as caretaker Prime Minister Yingluck Shinawatra faces key rulings that could force her out of office. There are some signs that the ruling party and the opposition are at least ready to start …
6th May 2014
The Reserve Bank of Australia (RBA) left its policy rate unchanged at 2.5% at its meeting today, and re-iterated that it does not expect to make any changes in the near term. … Australia more likely to cut than hike rates later in …
Indonesia's economy slowed in Q1, and we think that tight monetary policy, along with weak demand for commodity exports, will prevent a bounce-back to the 6%-plus growth rates that not long ago looked like the norm. … Growth in Indonesia to remain …
5th May 2014
The coming week sees scheduled monetary policy meetings in five countries. Korea, Australia and Indonesia look almost certain to keep interest rates on hold. The decisions in the Philippines and Malaysia are more finely balanced, and we wouldn’t be …
The April PMIs for Emerging Asia suggest the region's manufacturing recovery has yet to shift up a gear. However, improving external demand should provide a boost to Asian industry in the coming months. … External demand to bolster Asia's manufacturing …
2nd May 2014
Most of Asia’s stock markets recorded gains in April, buoyed by capital inflows. The positive sentiment toward Asian equities appears to reflect an easing of fears over a hard landing in China, as well as reassuring comments from the US Fed. … Asian …
30th April 2014
Taiwan recorded another quarter of decent growth in Q1, helped by robust exports and private consumption. Looking ahead, the economy should continue growing at a solid pace on the back of loose monetary policy and a further pickup in export demand. … …
Political developments have taken central stage over the past month. Election season is underway in India and Indonesia. Investors are optimistic that India’s election will bring about a positive change in policymaking, but similar hopes in Indonesia have …
29th April 2014
Rising consumer confidence in India suggests that the long-running slump in consumption may soon come to an end. However, any recovery in household spending is likely to be muted as consumers continue to face high inflation, high interest rates, and a …
Export growth from Emerging Asia remains lacklustre. Things should improve over the next couple of years on the back of a recovery in the developed world, which should more than compensate for weaker demand from China. … Slower growth in China won’t …
28th April 2014
The Reserve Bank of New Zealand (RBNZ) raised its policy rate by 25bp to 3.0% today, and made it clear in its statement that more rate hikes are on the way. Although the RBNZ’s own forecasts have not been the most reliable guide to future rate changes, we …
24th April 2014
Korea’s economy recorded another quarter of solid growth in the first quarter of the year thanks to a rebound in investment and continued recovery in export demand. Looking ahead, the economy should continue to grow at a decent pace over the next couple …
