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Thailand’s economy was not as badly damaged by the outbreak of political unrest in Q4 last year as we had feared, but with the disruption escalating since late December, much worse probably lies ahead. With no clear resolution to the current political …
17th February 2014
Following an inconclusive general election, Thailand’s power vacuum is likely to persist for a couple more months at least. Most attention has been focused on the potential short-term economic disruption. But this crisis is only the latest flare up in a …
Bank Indonesia (BI) today left interest rates on hold for a third consecutive month. With the rupiah showing signs of resilience, inflation likely to fall back in the second half of the year, and the current account deficit set to narrow, we believe …
13th February 2014
The Bank of Korea’s (BoK) decision to keep interest rates on hold for a ninth consecutive month comes against a background of weak price pressures. Looking ahead, with inflation set to remain subdued, we think interest rates will be left at their current …
Today’s output and inflation data from India were, in each case, a little better than expected but they won’t drive away the dark cloud that hangs over the outlook for the economy. Industrial production (IP) contracted in y/y terms for a third straight …
12th February 2014
The acceleration in Malaysia’s economy in the final quarter of 2013 reinforces our view that the central bank is likely to tighten monetary policy sooner rather than later. While policy tightening, accelerating inflation and high household debt burdens …
The rupee has come through the recent EM turbulence largely unscathed. But the authorities have hinted at the possibility of easing the gold import curbs that have reduced the trade deficit and thereby supported the currency. We think policymakers will …
11th February 2014
After five months in office, nobody would accuse Raghuram Rajan of keeping a low profile. Rarely has a central bank governor been such a regular fixture in local papers. The global media is also paying close attention in what has been a crucial period for …
10th February 2014
Bank Indonesia meets this week with the rupiah having so far come through the latest period of EM turmoil in reasonable shape. As such, it is under little pressure to follow other EM central banks in hiking rates. What’s more, we doubt that earlier …
Today’s decision by the central bank in the Philippines (BSP) to keep interest rates on hold at a record low of just 3.5% came as no surprise. With the recent increase in inflation likely to prove temporary, we think the central bank will look to keep …
6th February 2014
The full set of Emerging Asia GDP data for the final quarter of 2013 is yet to be released, but our tracker suggests the region as a whole struggled for momentum. Weak industrial production was a key factor, but forward-looking indicators suggest things …
Indonesia's economy accelerated slightly in Q4, but growth was still below 6% for the third consecutive quarter. With monetary policy set to remain tight, inflation eating into consumers’ purchasing power and commodity exports likely to struggle, we …
5th February 2014
The Reserve Bank of Australia (RBA) held its cash rate at 2.5% today, as expected. Moreover, it strongly suggested that it is does not expect to change policy in the foreseeable future. For now, policy loosening looks to be off the agenda. … Australia …
4th February 2014
Although Sunday's general election proceeded as scheduled, Thailand's political crisis shows no sign of letting up. While the incumbent Pheu Thai Party almost certainly won the most votes, it could be months before it is able to form a new government, if …
3rd February 2014
The Philippines economy came through the disruption caused by Typhoon Haiyan reasonably well, posting healthy growth in the final quarter of 2013. The outlook is also bright, with long term growth prospects among the best in Asia. In this Weekly , we …
The Reserve Bank of New Zealand (RBNZ) kept its policy rate unchanged at 2.5% today, but it made clear in its statement that it will be raising rates soon. As long as data releases continue to show that the economy is doing well, a rate hike now looks …
30th January 2014
Malaysia’s central bank (BNM) unsurprisingly kept its policy rate unchanged at 3.0% at its meeting today. But with the economy gradually gaining traction, we think the next move in rates is likely to be a 25bp hike, probably sometime in the first half of …
29th January 2014
Asia has escaped the worst of the latest sell-off in EM assets. What’s more, some of the economies that were hit hardest during the turmoil of last summer have proved more resilient this time around. … Asia escaping the worst of recent EM …
The Reserve Bank of India (RBI) surprised the market with a rate hike today, signalling its commitment to bringing down inflation, while perhaps also hoping to protect the rupee amid the ongoing emerging market turmoil. While the hiking cycle looks to be …
28th January 2014
GDP data released today for the final quarter of 2013 show that Taiwan’s economy ended 2013 on a solid note. Growth is likely to increase gradually in y/y terms over the next couple of years, helped by continued low interest rates and an expected pickup …
Emerging Asia is continuing to struggle. While rising demand from the developed world is helping some economies, most notably Korea, it looks like the region as a whole ended the year on a lacklustre note. China’s slowdown is partly to blame, with …
27th January 2014
A good harvest appears to have dampened food price inflation in India. As a result, consumer and wholesale prices both fell sharply at the end of 2013. While inflation is likely to ease further over the coming months, it will be a while before the Reserve …
Korea's economy recorded another quarter of strong growth in Q4 last year, thanks mainly to a pick-up in external demand. The economy should remain fairly strong over the next couple of years, thanks to continued loose monetary policy and an expected …
23rd January 2014
Despite rising concerns about the impact of Thailand's political crisis on the economy, the Bank of Thailand (BoT) opted to keep its policy rate at 2.25% today. But with no clear resolution to the political crisis in sight, a rate cut at the next monetary …
22nd January 2014
Thailand’s political tensions have ratcheted up a notch, with the government today declaring a state of emergency in Bangkok. In this Update , we consider several scenarios for how the political crisis may now unfold, along with the implications for …
21st January 2014
Fiscal policy is likely to impose a drag on India’s growth this quarter. Weak revenue growth and the government’s firm commitment to reduce this year’s fiscal deficit have left it with little choice but to pursue austerity until March. … India: Fiscal …
20th January 2014
An article in Forbes , a business journal, comparing Singapore to Iceland and claiming that it is on the brink of financial crisis, has caused a stir in the city state this week. We have ourselves flagged up the potential danger posed by Singapore’s rapid …
Most of Emerging Asia should enjoy a steady recovery in 2014-15 on the back of loose monetary policy and an expected recovery in the developed world. China is the main exception. Recently announced reforms should in time boost growth but, in the short …
14th January 2014
Industrial production data published on Friday showed output contracting for the second straight month in November. Going forward, the pressures exerted by elevated inflation and high interest rates on household demand will continue to weigh on the …
13th January 2014
Emerging Asia’s exports have continued on a path of slow recovery in recent months. Exports should gain more momentum over the next couple of years as demand from advanced economies strengthens. The region’s open, manufacturing-based economies will …
Bank Indonesia (BI) today left interest rates on hold for the second consecutive month, suggesting it has become less concerned by the weakness of the currency. Looking ahead, with inflation set to fall back sharply later this year, the current account …
9th January 2014
The Bank of Korea (BoK) kept its policy rate on hold today for the eighth consecutive month. With the economy set to stage a gradual recovery over the next year and inflationary pressures likely to remain subdued, we expect interest rates will remain on …
Thailand’s political crisis is showing no sign of nearing an end. A prolonged impasse could disrupt the roll-out of the government’s key public infrastructure projects, and cause further damage to the tourism industry, which has been one of the economy’s …
8th January 2014
In this first Weekly of 2014, we take our usual look at the important elections that are set to take place in Asia over the coming year, assessing the implications for policymaking and the region's economies. … Elections in 2014 – what they mean for …
6th January 2014
The central bank of Sri Lanka (CBSL) left its deposit rate on hold today, but cut its lending rate to a new record low against a backdrop of easing inflationary pressures. Looking ahead, with economic growth accelerating, we believe further monetary …
2nd January 2014
The December PMIs for Emerging Asia point to gradually improving conditions in the region's manufacturing sectors, other than in China. New orders continued to rise nearly everywhere, suggesting growth momentum should remain intact. … PMIs suggest …
Thailand heads into 2014 in political crisis. Anti-government protests that began in November have pushed the prime minister, Yingluck Shinawatra, into dissolving parliament and calling new elections. Protestors have remained on the streets and protest …
24th December 2013
Asian financial markets took the Fed’s decision last week to taper its asset purchases under QE3 largely in their stride. Currencies fell, but not by much, while equity markets on the whole were up slightly. … Asian markets shrug off Fed …
23rd December 2013
In this Weekly we outline our key calls for the region in 2014. Emerging Asia will remain a bright spot in the global economy, with growth set to accelerate in most economies on the back of continued loose monetary policy and an expected pick-up in demand …
New Zealand’s economy staged a strong rebound in Q3, after drought hit agricultural and manufacturing production in the first half of the year. We expect solid growth next year, underpinned by strong residential investment. … New Zealand's outlook …
19th December 2013
The Reserve Bank of India (RBI) kept policy rates on hold at its meeting today. Given that the economic recovery is still very fragile, the central bank is likely to remain patient with inflation. Overall, we think the rate hiking cycle is probably over …
18th December 2013
In our final Weekly of 2012 we outlined our key calls for the year ahead. We'll be doing the same again next week before heading off for our Christmas break. This week we take a look back at how we did in 2013. … Our key calls for 2013: how did they …
16th December 2013
Bank Indonesia (BI) today left interest rates on hold, as expected. With inflation probably having peaked, the current account deficit shrinking, and signs that the central bank is becoming less concerned by currency weakness, we believe the tightening …
12th December 2013
The central bank in the Philippines (BSP) left interest rates on hold today, as expected. Looking ahead, we expect the BSP will keep monetary policy settings unchanged until 2015 as it looks to support reconstruction spending following November's typhoon. …
The Reserve Bank of New Zealand (RBNZ) kept its policy rate unchanged at 2.5% today. In its statement, the central bank sounded slightly more hawkish on inflation, but it still looks like it will wait until the second quarter of next year before hiking …
The Bank of Korea (BoK) kept its policy rate on hold today for the seventh consecutive month. With inflationary pressures low and the economy set to stage only a gradual recovery over the next year, we expect monetary policy to be left unchanged until …
Markets have rallied in India on the back of the opposition Bharatiya Janata Party’s strong showing in state elections, which puts it in a strong position ahead of the general election in a few months’ time. Whatever the outcome of that election though, …
9th December 2013
Thailand's Prime Minister Yingluck Shinawatra dissolved parliament today and called for elections "as soon as possible". This step is unlikely to resolve political tensions, given that the opposition has little hope of defeating the government in an …
Inflation in Emerging Asia has picked up in the past few months, albeit to a rate that is still low by historic standards. While the inflation outlook is not quite as benign as it has been for the last couple of years, there is scope for most central …
In its latest move to rein in subsidy spending, the Malaysian government this week announced that it will hike electricity tariffs in 2014. Further subsidy cuts, particularly on the fuel front, are likely to follow, suggesting inflation could hover …
6th December 2013
