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Singapore’s latest GDP figures will be released on Thursday and are likely to show that the economy contracted in the second quarter. However, this should be seen in the context of strong growth earlier this year. The expansion should resume in the second …
12th July 2011
The Central Bank of Sri Lanka (CBSL) kept its policy rates on hold today, as expected. Growth slowed at the start of the year due to heavy floods, while headline inflation has been trending lower and is likely to continue doing so. The upshot is that the …
9th July 2011
Bank Negara Malaysia (BNM) kept its policy rate at 3.0% today whereas both we and the consensus had anticipated a 25bp hike. Malaysia’s central bank instead opted to raise its reserve requirement ratio by 100bp to 4.0%. The chance that BNM stays on the …
8th July 2011
The Reserve Bank of Australia (RBA) held its cash rate at 4.75% today, as was widely anticipated. A run of poor economic data has prompted market participants to expect that the next move in the cash rate is likely to be down. We disagree, although we …
6th July 2011
Manufacturing output across Emerging Asia is likely to grow at a sluggish pace in the near term given the weakness in global demand. However, output and orders continue to rise in most countries in both Emerging Asia and elsewhere, albeit at a slower …
5th July 2011
This report is only available as a PDF. Click to download. … Manufacturing growth to slow, but not sharply …
Most of emerging Asia should continue to grow rapidly for at least another decade, and much longer if the right policy choices are made. The key exception is China where, despite a bright long-run outlook, structural reform is needed sooner rather than …
Fears of a widespread bubble in emerging markets look overdone, but there are growing signs that rapid capital inflows are stoking problems in several countries. We think the biggest risks lie in Turkey and Brazil, where the threat of a sharp downturn in …
2nd July 2011
Inflation remains high across much of the region and policy rates have moved up in India, Korea, Taiwan and Thailand in recent weeks. More policy tightening is on the way in Asia. However, concerns over capital inflows and the risk of inflating asset …
1st July 2011
Taiwan’s slow pace of interest rate hikes is likely to continue into next year against a backdrop of strong economic growth and lingering property price concerns. … Taiwan’s slow tightening cycle still has far to …
The relative valuations of emerging market equities and bonds are no longer as attractive as they have been in the past. But the fears of overheating and hard landings that have held many back so far this year are generally exaggerated or at least …
Policy rates across Emerging Asia are likely to rise further towards pre-crisis levels in the coming months. However,tightening cycles should end next year with rates below their 2008 peaks. Most currencies in the region are likely to appreciate against …
The strength of the recent surge in India’s exports is partly a result of the rise in prices of commodities, and particularly metals. As such, we expect export growth to moderate in the coming months. Nonetheless, the long term trend for total export …
28th June 2011
Singapore’s small, open economy is susceptible to weakening global conditions, but we believe that growth will prove to be resilient this year. Strengthening domestic demand and intraregional links should ease the blow from softer conditions in the West. …
21st June 2011
The Philippines’ central bank (BSP) unexpectedly left its overnight rate at 4.5% today, but it did tighten policy settings by hiking its reserve-requirement ratio. Growth in 2011-12 looks set to be above levels seen over the past decade, while core …
17th June 2011
The Reserve Bank of India’s (RBI) decision to raise its repo rate by 25bp to 7.5% from today was widely expected following the further rise in inflation in May. We now expect inflation to peak at close to 11% in Q3 before falling, more gradually than the …
The Central Bank of Sri Lanka (CBSL) kept its policy rates on hold today, as expected. Core inflation is low, but current policy settings are very accommodative while the economy is set for another year of above-trend growth. Accordingly, we still believe …
15th June 2011
The Bank of Korea's decision to raise its policy rate by 25bp to 3.25% on Friday surprised the consensus which had expected no change but was in line with our view. We expect another hike in Q3 and see the base rate reaching 4.0% by mid-2012. However, the …
14th June 2011
Bank Indonesia (BI) kept its reference rate at 6.75% today, as was widely anticipated. The central bank is still relying on rupiah appreciation to ease the blow from higher commodity prices. Nonetheless, core inflation should continue to trend higher as …
9th June 2011
The Reserve Bank of Australia (RBA) held its cash rate at 4.75% today, as expected. The global economy looks to be slowing, but above-trend growth is nonetheless still likely in Australia and there is already little spare capacity in the economy. We …
7th June 2011
Pakistan’s federal budget was announced late last week with the aim to narrow the chronic fiscal deficit. The government is rightly looking to broaden the tax base and scale back subsidies, but improvement on the fiscal side has historically proven …
6th June 2011
We have changed our forecast that Bank Indonesia (BI) will raise its policy rate on Thursday and now believe that the reference rate will be held at 6.75%. This is because headline inflation continues to trend lower, while recent data suggest that global …
Purchasing Managers’ Indices (PMIs) released today for India, Korea, Taiwan, Singapore and Australia all worsened. However, the declines were generally small. These data suggest that manufacturing sectors in the region have so far been resilient to the …
1st June 2011
Today’s Q1 GDP data show that Australia’s economy contracted in early 2011 at its fastest pace since the 1991 recession. However, the weakness was down to local floods and Cyclone Yasi. Growth will inevitably resume in coming quarters. The key point is …
The Bank of Thailand (BoT) hiked its policy rate by 25bp to 3.0% today, as expected. The economy grew at an above-trend pace at the start of the year, while price pressures should continue to mount in coming quarters. We expect another 25bp hike in July, …
GDP numbers released today show that growth in India eased slightly in Q1 2011. We expect it to fall further in the first six months of this financial year, which runs from April 2011 to March 2012, but to recover after that. Meanwhile, inflation is set …
31st May 2011
Q1 GDP for the Philippines, published today, showed that the economy continued to expand despite a significant fall in government spending. The big picture is that domestic demand remains robust despite growing external sector risks. As such, the central …
30th May 2011
Australia’s Q1 GDP data will be released on Wednesday and are likely to show that the economy contracted in early 2011. However, the weakness was mainly down to local floods and Cyclone Yasi. Growth will inevitably resume in coming quarters. The key point …
Q1 GDP data out so far across Asia confirm that most economies have been growing at or above their trend pace. Strong growth has left little spare capacity in many economies and core inflation continues to trend higher. Policy interest rates have moved up …
27th May 2011
April price data show that inflation is highest (and is still rising) in Vietnam while it is lowest in Taiwan. Looking ahead, global commodity prices are likely to put downward pressure on headline inflation later this year. But core inflation, which is …
23rd May 2011
Today’s Q1 GDP data for Thailand show that the economy grew at a faster q/q pace at the start of this year, as expected. Growth in the coming quarters should be supported by strengthening domestic demand and exports to the rest of Asia. The upshot is that …
In a move that was widely anticipated, the State Bank of Pakistan (SBP) left its policy rate unchanged at 14.0% over the weekend. The upcoming FY2011-12 budget and subsequent fiscal developments will be the key area to watch in determining monetary …
Despite 2011 being an election year, New Zealand’s government today announced a budget with few giveaways. The aim to move back into a surplus by 2014-15 will be tough to achieve, especially if initial estimates of the cost of rebuilding Christchurch are …
19th May 2011
Malaysia’s economy grew at a slightly slower pace at the start of the year, which surprised the consensus but was in-line with our view. Strengthening domestic demand should mean that growth picks up during the course of the year. Price pressures are …
18th May 2011
Headline inflation fell slightly in April but is likely to rise again in the coming few months. Meanwhile, indicators of activity suggest economic growth in India is still rapid. The upshot is that we still expect the RBI to raise rates by 25bp in June …
16th May 2011
The Central Bank of Sri Lanka (CBSL) left its interest rates unchanged today, as was widely anticipated. Nonetheless, policy settings were tightened in April and more rate hikes look only a matter of time. … Sri Lanka's central bank biding its …
Policymakers in Vietnam have been busy so far this year tackling the risk of the economy overheating. Nonetheless, policy settings were left too loose for too long and recent data show that broad-based price pressures continue to mount. Accordingly, we …
The Bank of Korea (BoK) unexpectedly held its policy rate at 3.0% today. Nonetheless, GDP growth has picked up to an above-trend pace, while core inflation looks set to climb further. We still believe that more policy tightening is on the way, although …
13th May 2011
Today’s decision by Bank Indonesia (BI) to hold its reference rate steady at 6.75% was anticipated given recent downside surprises in headline inflation. However, core inflation continues to climb while the economy is set to grow at an above-trend pace in …
12th May 2011
Despite recent natural disasters, Australia’s government stuck to its aim of moving back into a surplus by 2012-13 in today’s federal budget. The goal is likely to be achieved given the prospect of restrained public spending and strong GDP growth. …
10th May 2011
We expect Korea’s central bank to raise its base rate by 25bp to 3.25% on Friday. This is also the consensus view. GDP growth was strong at the start of the year while core inflation, which excludes food and fuel, is high and looks set to climb further. …
9th May 2011
Today’s 25bp policy rate hike by Bank Negara Malaysia (BNM) surprised the consensus, which expected no change, but was in line with our forecast. We expect further tightening to 3.5% by the end of the year. … Bank Negara Malaysia set to tighten …
5th May 2011
The Philippines’ central bank (BSP) raised its policy rate by 25bp to 4.5% today, as expected. Core inflation has been trending upwards and is likely to continue doing so, while economic growth looks set to remain brisk. The upshot is that we are sticking …
Today’s Q1 GDP data were slightly weaker than the consensus had expected, but underlying growth momentum remains resilient. We still believe that price pressures rather than any concern over growth are the big risk facing Indonesia. Accordingly, our view …
The Reserve Bank of Australia (RBA) held its cash rate at 4.75% today, as expected. Nonetheless, core inflation rose in Q1 while above-trend GDP growth looks likely over 2011-12. The upshot is that we still expect the RBA to resume its policy tightening …
3rd May 2011
The Reserve Bank of India surprised the markets with a 50bp hike to the repo rate to 7.25% today, whereas both we and the consensus had expected 25bp. The accompanying annual Monetary Policy Statement has prompted us to revise up our forecast for the repo …
We expect the Reserve Bank of India to raise the repo rate by another 25bp to 7.0% on Tuesday. Recent data show that inflation has picked up again. Moreover, there are growing signs of demand-pull pressures. We also expect the RBI’s policy statement to …
2nd May 2011
As expected, the Reserve Bank of New Zealand (RBNZ) left its policy rate on hold at 2.5% today, after cutting by 50bp last month in response to the Christchurch earthquakes. Admittedly, the RBNZ will be in no rush to reverse that move. However, unlike the …
28th April 2011
