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Today’s slight increase in India's wholesale price inflation will not have greatly alarmed policymakers, but the increase in consumer price inflation is a bigger worry. The chances of the Reserve Bank of India (RBI) cutting interest rates in the near term …
15th July 2013
Singapore’s economy posted its strongest gain in two years in Q2. We are raising our full-yearforecast for 2013 but, as this Weekly explains, last quarter’s good performance will not be thestart of a robust and sustained recovery. Nor is it a harbinger of …
Thailand’s government can afford to maintain its rice subsidy scheme indefinitely, as long as GDP growth holds up and rice prices do not collapse. However, doing so would put at risk the goal of balancing the budget by 2017 and limit room for spending in …
12th July 2013
Malaysia’s central bank (BNM) kept its policy rate unchanged at 3.0% at its meeting today. We think rates will remain on hold until early 2014, when we have pencilled in a hike. … Malaysia to wait until 2014 before hiking …
11th July 2013
Bank Indonesia (BI) today hiked both its main policy rate and the Fasbi rate by 50bp amid concerns about the currency and the outlook for inflation. Consumer price inflation is likely to rise as high as 8% y/y in the coming months after the government …
The Bank of Korea (BoK) kept its main policy rate on hold at 2.5% today, as expected. Nevertheless, with inflation set to remain weak and economic growth likely to stay lacklustre, we have pencilled in a rate cut before the end of the year. By contrast, …
The Bank of Thailand (BoT) kept its policy rate at 2.50% at its meeting today. We believe the central bank’s easing cycle has come to an end, though subdued economic activity means rate hikes do not look imminent either. … No more cuts …
10th July 2013
Pakistan has reached an initial agreement with the IMF for a US$5.3bn loan. The deal should avert a balance of payments crisis but, as this Weekly explains, the conditions attached to the loan will create a drag on economic growth. … IMF deal no …
8th July 2013
Despite China’s ongoing slowdown, growth in the rest of Emerging Asia should pick up over the next couple of years, helped by a combination of loose monetary policy and stronger global demand. The improving outlook means that the end of the region’s …
5th July 2013
The Reserve Bank of Australia (RBA) kept its cash rate on hold at 2.75% at its meeting today, as was widely expected. In its accompanying statement, the RBA stressed that it expects an improvement in the economy in 2014. This more upbeat tone makes it …
2nd July 2013
The June PMIs for Emerging Asia suggest the region’s manufacturing sectors continue to struggle. New orders were particularly disappointing. We think fragile global demand will make life difficult for Asia’s manufacturers at least until the end of the …
1st July 2013
Concerns that a manufacturing renaissance in the US could negate the benefits for Asia of stronger US growth are probably overblown. But with the euro-zone and Chinese economies still subdued, Asian exporters have not yet put their struggles behind them. …
Data released today suggest that Vietnam’s economy remains in the doldrums, amid a severe banking crisis which has led to a squeeze on credit. Problems in the banking sector are likely to weigh on the economy, with growth over the next couple of years …
27th June 2013
The main development of the past month has been the big sell-off in financial markets which has been triggered by worries about the consequences of a scaling back of QE in the US. Foreign investors pulled money out of the region in June, sending equities …
26th June 2013
Hopes that the policies of Prime Minister Abe’s new government will transform the outlook for Japan’s economy have lifted sentiment in the country. This Weekly takes a look at the implications of Abenomics for Emerging Asia. … What does Abenomics mean …
24th June 2013
As the Fed prepares to taper its program of quantitative easing, there are some concerns in Asia that it could trigger a messy re-run of 1994. We think these concerns are exaggerated. … Should Asia fear a repeat of …
21st June 2013
New Zealand’s economy grew slower than expected in Q1, as drought hit the agricultural sector. A pick-up is likely over the coming quarters, but weak export demand and tight fiscal policy will prevent a strong rebound. … New Zealand set for a moderate …
20th June 2013
Growing concern about the rupee’s decline and lingering worries about inflation appear to have been the key factors in the Reserve Bank of India’s decision to keep the repo rate unchanged at 7.25% today. We expect the rupee to remain under pressure and …
17th June 2013
Asian currencies have fallen sharply in recent weeks as worries about the consequences of a scaling back of quantitative easing continue to build. This Weekly looks at the macro impact of the sell-off in currencies and considers the implications for …
Today’s further fall in India's wholesale price inflation will come as a relief to policymakers. While the odds of a rate cut have now risen, we still think the Reserve Bank of India (RBI) will opt to stay on hold on 17 th June. The central bank will want …
14th June 2013
Bank Indonesia’s unexpected decision to hike its main policy rate today reflects concern about recent downward pressure on the rupiah and worries over the inflation outlook. Further hikes will follow. Elsewhere in the region though, countries are likely …
13th June 2013
The Reserve Bank of New Zealand (RBNZ) kept its policy rate at 2.5% today. We continue to expect the cash rate to remain on hold until the end of the year and to be kept low in 2014. … New Zealand will remain reluctant to hike …
Talk of “policy tapering” by the Federal Reserve has been the catalyst for a broad-based sell-off in emerging market currencies. Within Asia, the worst performer has been the rupee. Its decline underlines how reliant India’s economy remains on foreign …
12th June 2013
Bank Indonesia’s decision today to hike the rate it pays lenders on overnight deposits (also known as the Fasbi rate) reflects concerns about the weakness of the rupiah and falls in the level of foreign exchange reserves. Changes in the Fasbi arguably …
A number of Asian currencies have experienced big falls against the US dollar over the past few weeks. This Weekly looks at which currencies have been hit the hardest, the factors behind the recent declines, and the outlook for Emerging Asian currencies …
10th June 2013
Australia’s GDP growth remained slightly below trend in Q1. We expect growth to slow over the coming quarters as monetary loosening is unlikely to fully offset cooling mining investment. … Australia's growth to be dragged lower by mining …
5th June 2013
The May PMIs for emerging Asia suggest the region’s manufacturing recovery has lost momentum. Most central banks have loosened monetary policy in recent months, but they will not be able to fully offset they drag from weak external demand. … May PMIs …
3rd June 2013
Inflation has fallen sharply across most of Asia over the past few months, giving central banks scope to cut interest rates. This Weekly explains why inflation is likely to remain low over the next year and considers the implications for monetary policy. …
Marginally stronger GDP growth signals a bottoming out of India's growth slump. But domestic demand remains weak. Against this background, and following its three rate cuts so far this year, we think the central bank will cut rates once more but only near …
31st May 2013
GDP growth in the Philippines accelerated in Q1 on the back of strong domestic demand. Against this background, we think the central bank will leave interest rates on hold for the rest of 2013. … Strong GDP growth in the Philippines makes rate cuts …
30th May 2013
The Bank of Thailand cut its policy rate for the first time since October at its meeting today, under heavy pressure from the government. Another rate cut is likely in the coming months. … Thailand's government will push for more rate …
29th May 2013
One of the most notable features of the Q1 GDP data for Emerging Asia is the continued weak performance of the NIEs (Newly Industrialised Economies, Korea, Taiwan, Hong Kong and Singapore). This Weekly looks at why growth in these economies has been so …
27th May 2013
Today’s revised GDP data showed that Singapore's economy expanded in Q1, despite an advanced estimate released in mid-April pointing toward contraction. Nevertheless, weak export growth continues to weigh on the trade-dependent economy. Lacklustre global …
23rd May 2013
Economic growth slowed nearly everywhere in Asia last quarter. This weakness, alongside low inflation and, in the case of Korea and Australia, worries over currency strength, prompted five central banks to cut interest rates last month. Looking ahead, …
22nd May 2013
Thailand’s economy struggled last quarter, but a modest rebound is likely over the coming quarters. Against this backdrop, we think the central bank will continue to resist pressure to cut rates. … Thailand's economy should rebound from weak …
20th May 2013
Although most Asian countries invest more than their counterparts in other emerging regions, there is still scope for many countries in Emerging Asia to boost GDP growth by investing more. However, as this Weekly explains, many countries look likely to …
Today’s GDP data show that Malaysia’s economy slowed more than expected in Q1. Subdued global demand is likely to prevent a strong recovery over the coming quarters. … Malaysia’s economy to settle at a slower growth …
15th May 2013
Australia’s government expects to make little headway in reducing its budget deficit in 2013/14. The government had previously been aiming to balance the budget in the current fiscal year, but revenues have failed to meet expectations. Nevertheless, …
The continuing slide in India’s wholesale price inflation will come as a relief to policymakers, but expectations of another near-term rate cut are likely to be disappointed. The RBI will want to see evidence of substantial declines in both consumer price …
14th May 2013
The central banks of Sri Lanka and Vietnam cut interest rates on Friday. This Weekly looks at the factors behind the rate cuts and explains why further monetary policy loosening is likely in both countries before the end of the year. … Where next for …
13th May 2013
S&P today upgraded the Philippines to investment grade status, becoming the second major ratings agency to do so in just over a month. However, this is unlikely to have a major impact on government bond yields, which are already at record lows. … What …
10th May 2013
The Bank of Korea unexpectedly cut interest rates today amid fears over the strength of the global economy and concerns about the weakness of the Japanese yen against the won. Low inflation means there is scope for more rate cuts in the coming months and …
9th May 2013
The Reserve Bank of Australia cut its cash rate by 25bp to 2.75% at its policy meeting today. We expect it to cut again before the end of Q3 to compensate for a cooling mining boom. … Australia likely to cut its policy rate …
7th May 2013
Indonesia recorded another quarter of solid growth in Q1. Weak exports and lower commodity prices will act as a drag on the economy in 2013-14. However, as a domestically-driven economy, Indonesia is relatively well-placed to withstand the impact of …
6th May 2013
Pakistan will hold parliamentary elections on 11th May. The elections mark a watershed moment in the Pakistan’s political history, as they are the first time that one elected government will have served out its full term and handed over power to another …
Today's policy rate cut by the Reserve Bank of India (RBI) is likely to be the last for several months. We think the RBI will pause to assess the impact of the 75bp of rate cuts seen so far this year. Thereafter, still-high inflation will limit the space …
3rd May 2013
The May PMIs for emerging Asia suggest the manufacturing recovery is still struggling for momentum. Importantly, new export orders faltered this month. Loose monetary policy will only partly compensate for continued weakness in developed markets over the …
2nd May 2013
Today’s GDP data for Taiwan shows that economic growth slowed considerably in the first quarter. The economy is unlikely to pick up strongly in the coming months, and with inflation set to remain low, the central bank (CBC) will look to keep interest …
30th April 2013
Strong credit growth in Indonesia has led to concerns that the country could be planting the seeds of the next financial crisis. As this Weekly explains, these worries are overdone. The warning signs for Indonesia are much weaker than in Hong Kong, China …
29th April 2013
Worries over capital inflows are a major concern for the central bank in the Philippines (BSP), which has been stepping up efforts to deter “hot money”. Although the BSP left its key overnight rate on hold today as expected, low inflation and the …
25th April 2013
