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Following a 25bp cut to its policy rate last month, the Bank of Thailand (BoT) adopted a wait-and-see approach today and kept the benchmark rate unchanged. With demand still fragile, we expect monetary policy will stay accommodative to support activity. …
23rd April 2014
Most economies in the region are due to release Q1 GDP data over the next few weeks. OurGDP tracker suggests economic growth was broadly unchanged in Emerging Asia (excludingChina) from Q4. The Newly Industrialised Economies (NIEs, Hong Kong, Singapore, …
22nd April 2014
Indian inflation ticked up in March, ending a downward trend that had raised some hopes that the central bank might be winning its battle with price pressures. There are a number of reasons to think that inflation will ease only slowly over the rest of …
15th April 2014
A hard landing in China’s economy is one of the biggest risks clouding the outlook for the rest of Emerging Asia. A slump in Chinese demand would hurt economies with close trade links to China, with commodity exporters likely to be especially hard-hit. A …
With domestic demand struggling under the weight of the ongoing political unrest, exports have become the main beacon of hope for Thailand’s economy this year. However, we doubt the export sector can do much more than partially cushion the downturn in the …
Today’s GDP data showed that Singapore's economy barely expanded in Q1. Recovering global demand should, nevertheless, ensure solid growth over the rest of 2014. As such, the MAS saw no reason to change its policy stance at its meeting today, and is …
14th April 2014
Weak industrial output in February has dented hopes of a manufacturing-led rebound in India's economy. With prospects for domestic demand looking downbeat, India's economic recovery will remain slow and uneven. … Indian manufacturing struggling for …
Our recently published Emerging Asia Outlook paints a fairly benign picture of the region’s growth prospects, with most economies set to make a gradual recovery in 2014-15. This Weekly looks at some of the potential stumbling blocks that could upset our …
Most countries in Emerging Asia should enjoy a steady recovery over the next couple of years on the back of loose monetary policy and a pickup in demand from advanced economies. However, a number of domestic issues within the region are coming into focus. …
10th April 2014
The Bank of Korea (BoK) left interest rates on hold today for the eleventh consecutive month in what was Lee Ju-yeol’s first meeting as new governor. As a former deputy governor with 35 years of experience at the central bank, Mr Lee is widely regarded as …
The disappearance of Malaysian Airlines flight MH370 a month ago has raised concerns about the prospects for Malaysia's tourism sector and the country's relationship with China. But while the tourism sector may suffer some short-term setbacks, …
9th April 2014
Bank Indonesia (BI) left interest rates on hold today and is unlikely to change its stance any time soon. Falling inflation and fading external vulnerabilities suggest further rate hikes are no longer warranted. Meanwhile, rate cuts are unlikely given the …
8th April 2014
Indonesia’s elections get underway later this month. They come at a crucial time, with the economy stuttering and confidence in the current leadership at a low ebb. The presidential favourite, Joko Widodo, is widely seen as the man to turn things around, …
7th April 2014
The Reserve Bank of India (RBI) left interest rates unchanged today, and we suspect that its rate hiking cycle is at an end. However, tackling inflation is still the RBI's main priority, which means it will be a while before a rate cut is considered to …
1st April 2014
The March PMIs for Emerging Asia were a mixed bag, reinforcing our view that Asia's manufacturing recovery is likely to remain bumpy. … Manufacturing recovery intact, but to stay …
The Reserve Bank of Australia (RBA) held its cash rate at 2.5% today, amid signs that the non-mining economy continues to improve. Policy loosening remains off the agenda for now, but we still think the RBA will provide more support later in the year. … …
After a solid bounce across the board in February, the performance of most Asian currencies and equity markets was muted over the past month. That said, investors were still showing improved appetite for investing in some of the economies where assets …
31st March 2014
Vietnam's exports have been a rare bright spot for its struggling economy in recent years, mainly owing to the country's success in attracting foreign manufacturers that want a low-cost alternative to China. However, export success will not be enough to …
Although the central bank in the Philippines (BSP) opted to keep the overnight rate on hold at a record low of just 3.5% at its meeting today, it hiked its reserve requirement ratio by 1pp, suggesting more meaningful monetary tightening is probably on the …
27th March 2014
Taiwan’s central bank (CBC) left interest rates on hold today, as was widely expected. The economy is performing better, but with inflation set to remain subdued we expect the CBC to keep interest rates unchanged for some time yet. … Taiwan's central …
After enduring a slump for much of 2013, retail sales in Emerging Asia (ex. China) appear to have turned a corner. Growth has picked up strongly across most countries in the region in recent months. With inflation low and monetary policy likely to remain …
26th March 2014
Thailand’s ongoing political crisis took a new turn on Friday with the constitutional court deciding to annul the February general election. The annulment brings the crisis no closer to a resolution. Without an agreement between opposing parties, a new …
24th March 2014
The Philippines has been making good progress in developing a competitive manufacturing sector. Low wages, the relocation of labour-intensive manufacturing from China, and recent improvements to the business environment bode well for the future. All in …
Concerns over structural constraints on growth have come to the fore recently, in the wake of prolonged slowdowns in some of the world's biggest emerging economies. There are some fears that parts of Emerging Asia might run into similar problems. For the …
Recent polls pointing to a rising margin of victory for the opposition BJP in the upcoming elections have boosted business confidence. But we think such optimism may be misplaced, with coalition politics still likely to constrain the next government’s …
21st March 2014
A recent collection of upbeat data has been taken by a number of commentators as a sign that Australia's economy has turned a corner. Most are expecting faster growth in 2014. But with the economy on the cusp of a sharp fall in mining investment, we doubt …
20th March 2014
New Zealand’s economy slowed in Q4, largely owing to the fading impact of the recovery from a drought that hit the country in the first half of last year. Broader indicators suggest the economy is in good health but there will still be a few headwinds to …
Sri Lanka recorded another quarter of strong growth in Q4 last year on the back of a continued recovery in external demand and accommodative monetary policy. These factors are likely to continue to support growth over the next couple of years and we …
17th March 2014
Inflation in Emerging Asia has fallen back over the past few months and remains low by historical standards. Looking ahead, inflation looks set to remain fairly benign. Currency weakness over the past year is unlikely to lead to a sharp rise in imported …
The Bank of Korea (BoK) left interest rates on hold today for the tenth consecutive month in what was Kim Choongsoo’s final meeting as central bank governor. The handover to Lee Ju-yeol, a former deputy governor, at the end of the month is unlikely to …
13th March 2014
With India’s domestic demand held back by tight monetary policy, export demand is likely to play a pivotal role in any economic recovery this year. Recent export data have been disappointing. But a closer look suggests a rebound may soon be underway. … …
12th March 2014
Today’s industrial production and inflation data show India’s beleaguered economy moving in the right direction, but we doubt the latest drop in inflation will be enough to prompt the Reserve Bank to rethink its stance. … Encouraging Indian data …
Amid rising downside risks to growth, the Bank of Thailand (BoT) opted to cut its policy rate by 25bps today. With no clear sign that the political impasse will be resolved soon, we expect interest rates to be kept low to support growth. … Thailand …
With New Zealand’s economic recovery gaining momentum, inflation rising and house prices booming, the country’s central bank looks set to hike interest rates on Wednesday for the first time in nearly four years. … Rate hikes coming in New …
10th March 2014
Malaysia’s central bank (BNM) kept its policy rate unchanged at 3.0% today as expected, but with the economy gradually gaining a firmer footing, a 25bp rate hike is unlikely to be far away. … Malaysia’s rate hike around the …
6th March 2014
GDP growth in Australia accelerated in the final quarter of last year. Looking ahead, we expect the economy to lose momentum over the coming quarters, as the boom in mining investment continues to cool. … Australia’s economy set to slow in …
5th March 2014
The Reserve Bank of Australia (RBA) held its cash rate at 2.5% today, as expected. For now, policy loosening looks to be off the agenda, but we suspect that a rate cut will be needed later in the year as growth dips further below trend. … Australian …
4th March 2014
The February PMIs for Emerging Asia point to a slight deterioration in the region's manufacturing conditions. The pullback in the new orders component suggests Asia's manufacturing recovery is likely to remain bumpy. … PMIs point to gradual and uneven …
3rd March 2014
GDP data for the fourth quarter of 2013 showed that regional growth was unchanged from Q3. Improving prospects for exports bode well for the outlook, but domestic demand needs to cool in some economies. … Export recovery to support growth in …
Economic growth in India dipped in the final quarter of 2013, having picked up in Q3. Looking ahead,we continue to expect the economic recovery to remain slow and uneven. … India’s road to recovery to remain …
28th February 2014
Following sharp falls in January, Asian currencies and equity markets have rebounded over the past month. Meanwhile, government bond yields have been broadly flat. … Asian currencies rebound, rupiah leads the …
27th February 2014
Malaysia has made decent progress in its bid to transition to high-income status by 2020. However, further reforms to enhance economic competitiveness are crucial to sustaining strong growth. … Malaysia making progress in escaping middle income …
Asian central banks have, for the most part, left interest rates on hold recently, with India the only major central bank in the region to adjust monetary policy over the past month. India raised rates to help combat inflation. However, in most economies, …
25th February 2014
President Park Geun-hye’s plans to raise trend growth to 4% by 2017 are unlikely to succeed. In fact, we see trend growth in Korea slowing to around 2% over the next decade. … Korean government growth target unlikely to be …
After coming through the latest bout of market turmoil with surprising resilience, it could be time for Indonesia and India to hand in their membership of the so-called ”Fragile Five”. Importantly, their increased stability looks to have been down to …
24th February 2014
Today’s budget for the coming fiscal year targets a small surplus, which comes as no surprise given the reasonably upbeat short-term outlook for the economy and lingering concerns over inflation. But Singapore’s bigger challenges are longer term. Further …
21st February 2014
Thailand has been mired in a political crisis since November last year which continues to show no clear sign of resolution. The prolonged impasse has disrupted economic activity and is hurting the economy's long-term growth prospects. … Thailand's …
20th February 2014
Today’s GDP data showed that Singapore's economy ended 2013 on a strong note. Recovery in advanced economies should support growth this year, even as domestic factors act as drags. Given the healthy outlook, the government is likely to resist short-term …
Domestic demand in India remains lacklustre, overshadowing the encouraging performance of exports. Trends in the auto industry provide a case in point, as healthy passenger vehicle exports have not been enough to offset still-weak domestic sales. Overall …
18th February 2014
