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Korea's economy grew at a faster pace in Q1, broadly in line with expectations. Despite greater uncertainty about global demand, we think policy-makers are right to worry more about inflation than growth. As such, we expect the Bank of Korea (BoK) to …
27th April 2011
Growing uncertainty about global growth is prompting some policymakers in the region to adopt a “wait and see” approach. However, we think that most of these concerns will soon dissipate. The key point is that, unlike in the major developed economies, …
25th April 2011
Inflation has risen further as food and fuel prices remain high and strong growth has left little spare capacity in many economies across the region. Policy interest rates will move up further, but the tightening cycles should stop with rates at levels …
21st April 2011
The Bank of Thailand (BoT) hiked its policy rate by 25bp to 2.75% today, as was universally expected. As with elsewhere in the region, keeping a lid on inflation remains the key concern for policymakers. We expect another 25bp hike at the next meeting in …
20th April 2011
The Bank of Thailand (BoT) announces its policy rate decision on Wednesday and we expect the repo rate to be raised by 25bp for the fourth meeting in a row, to 2.75%. Prospects for domestic demand remain bright, while core inflation has continued to …
18th April 2011
Inflation data released today strengthen the case for the Reserve Bank of India (RBI) to continue raising rates. We expect the repo rate to be hiked in May, followed by even more tightening this year. … Another jump in Indian inflation confirms case for …
15th April 2011
The Monetary Authority of Singapore (MAS) tightened policy today by re-centring its exchange rate target band at a higher level. Q1 GDP figures, also released today, were very strong and show that Singapore’s economy continues to perform well. …
14th April 2011
The Central Bank of Sri Lanka (CBSL) left its two key interest rates unchanged today, as was widely anticipated, but tightened policy by increasing its reserve requirement ratio. Unlike other central banks in the region, the CBSL is yet to start a …
12th April 2011
Bank Indonesia (BI) left its reference rate at 6.75% today, as was universally expected. Nonetheless, inflation remains uncomfortably high while the economy is set to grow at an above-trend pace in 2011-12. The upshot is that the pause in BI’s tightening …
The Bank of Korea (BoK) kept its base rate at 3.0% today, as expected. The strengthening won is doing some of the heavy-lifting in terms of policy tightening, but the central bank will not want to rely too much on the inherently volatile currency markets. …
Singapore’s GDP growth probably remained strong in Q1, keeping overheating as the main policy concern. With headline inflation remaining well above the central bank’s 3-4% target range, and wages rising at a rapid pace, we expect the Monetary Authority of …
11th April 2011
The Reserve Bank of Australia (RBA) held its cash rate at 4.75% today, as was universally expected. Nonetheless, above-trend GDP growth still looks likely in 2011-12 and will eventually lift price pressures. We continue to expect the RBA to hike its cash …
5th April 2011
The Reserve Bank of Australia (RBA) is likely to keep its cash rate on hold at 4.75% on Tuesday. Natural disasters, both local and overseas, have created an element of uncertainty and will probably discourage the central bank from raising rates for some …
4th April 2011
Manufacturing PMIs for March, released overnight and today, remained buoyant for India, but declined in Korea, Taiwan and dropped even more sharply in Australia. New export orders accelerated for both Taiwan and South Korea, possibly reflecting orders for …
1st April 2011
Economic growth in the region has remained healthy, while inflation has continued to climb. The disruption stemming from Japan’s 11th March earthquake and tsunami has increased uncertainty around the economic outlook, but should not derail growth within …
31st March 2011
Following today’s expected rate hike, the outlook for monetary policy in Taiwan depends largely on what happens to property prices. As things stand, rates are likely to rise again at the next quarterly meeting, but continued tightening into 2012 is not a …
Data released today show that Sri Lanka’s economy grew by 8.0% in 2010 as a whole, as we had long been expecting. The central bank (CBSL) left policy rates unchanged at its meeting in March, but we are sticking to our view that continued rapid GDP growth …
30th March 2011
Vietnam’s Q1 GDP figures were released today and show that growth eased at the start of the year. We expect the expansion to stay on a weaker track this year given policymakers’ ongoing efforts to wring out inflationary pressures. More policy tightening …
29th March 2011
The State Bank of Pakistan (SBP) left its policy rate unchanged at 14.0% over the weekend. The fiscal adjustment programme appears to be back on track and means that there is less urgency for SBP to tighten policy. However, more economic reform is needed …
28th March 2011
Mostcentral banks across the region will continue tightening policy settings thisyear, although the pace of policy normalisation will vary between countries. Wecompare the policy outlook for the Reserve Bank of India(RBI) and Bank Indonesia(BI). Although …
The Philippines’ central bank (BSP) raised its key policy rate by 25bp to 4.25% today, as expected. Rising food and fuel prices suggest that inflation will continue to accelerate in coming months and that the BSP’s target of keeping inflation within the …
24th March 2011
Today’s Q4 GDP figures confirm that New Zealand’s recovery was struggling to gain traction at the end of last year. Growth will be weak in the near term following the recent earthquakes, but we expect economic activity to surprise the Reserve Bank (RBNZ) …
There is no doubt that Japan has suffered a human tragedy, and we extend our deepest sympathies to those affected. The resulting economic impact on the rest of Asia-Pacific will be varied across countries and sectors, but we do not expect growth in the …
21st March 2011
The Reserve Bank of India (RBI) hiked the repo rate by 25bp to 6.75% today, as expected. In response to the RBI’s concerns about core inflation, we have revised our rate hike expectations upwards to 7.5% by end-2011, from 7.0% previously. … Reserve Bank …
17th March 2011
We expect the Reserve Bank of India (RBI) to hikes its key policy rates on Thursday. However, the spike in food prices appears to be unwinding, while recent activity figures have been weak. These trends support our view that the tightening cycle may …
14th March 2011
Malaysia’s central bank (BNM) left its policy rate unchanged at 2.75% today, in line with the consensus view but contrary to our expectations of a hike. Nonetheless, BNM resumed policy tightening by raising the statutory reserve rate (SRR) by 100bp to 2%. …
11th March 2011
The Reserve Bank of New Zealand (RBNZ) yesterday cut its cash rate by 50bp to 2.5% in response to last month’s devastating earthquake in Christchurch. The RBNZ made it clear that it intends to stay in wait-and-see mode for some time. The markets have now …
The Bank of Korea (BoK) lifted its policy rate by 25bp to 3.0% today, as was universally anticipated. Policymakers are rightly focused on tackling local price pressures, which are not solely due to the pick-up in global commodity prices. We expect the …
10th March 2011
The Bank of Thailand (BoT) raised its policy rate by 25bp to 2.5% today, as expected. As with elsewhere across the region, keeping a lid on inflation is the key concern for policymakers. We expect another 25bp hike in April, followed by even more …
9th March 2011
The decision of Vietnam’s central bank to raise both the refinancing and discount rates to 12% today (from 11% and 7% respectively) was in line with the recent top-level directive to get a grip on inflation. Indeed, the latest rate hikes should be seen as …
8th March 2011
The Central Bank of Sri Lanka (CBSL) kept its policy rates unchanged at today’s meeting, as expected. The economy looks set for another year of above-trend growth, while inflation has already begun to accelerate. We continue to expect that the CBSL will …
The Bank of Thailand (BoT) announces its policy rate decision on Wednesday and we expect the repo rate to be hiked by 25bp for the third meeting in a row, to 2.5%. The economy is strengthening and core inflation is already picking up. The repo rate is …
7th March 2011
Bank Indonesia (BI) paused the tightening initiated last month, leaving the reference rate unchanged at 6.75%. But today’s pause will probably be brief, given that underlying growth has remained robust whilst inflation is likely to rise further in the …
4th March 2011
Australia’s economy grew at a faster pace at the end of last year than in Q3, as expected. Recent natural disasters will lower GDP in this quarter but the outlook is positive. Growth should accelerate to an above-trend pace in 2011-12, with investment …
2nd March 2011
Manufacturing PMIs for February, released overnight and today, improved in India, Singapore and Australia and stayed above the key 50 level which signals expansion in Taiwan. Factory output looks set to be brisk at a time when inflation pressures are on …
1st March 2011
Markets are concerned that rising oil prices will lift inflation and hit economic growth in Asia. Relative to their economies, Korea and Taiwan are the biggest net oil importers within the region but we believe India and Thailand would probably struggle …
28th February 2011
The Indian budget, passed today, aims to bring the deficit down to 4.6% of GDP in 2011/12. We judge that this will be difficult to achieve, primarily because the planned expenditure reduction looks very ambitious. … India's budget targets look hard to …
The Reserve Bank of Australia (RBA) is virtually certain to keep its cash rate on hold at 4.75% on Tuesday. Low inflation, sluggish household spending, and the uncertainty created by the recent natural disasters are likely to keep the RBA on the sidelines …
India and Thailand would struggle most within Asia if oil prices were to remain at their current level. China is less reliant on oil than most in the region. In general, Asia’s strong growth would enable it to cope much better than the more fragile, …
24th February 2011
GDP growth across Emerging Asia has slowed, but is likely to pick up again soon. Domestic demand, trade between the emerging markets, as well as policy flexibility, will cushion the downside. Restraining inflation and ensuring that asset bubbles do not …
22nd February 2011
Today’s Q4 GDP data for Thailand show that the economy returned to q/q growth at the end of last year, as expected. Growth is likely to pick up during the course of this year, led by strengthening domestic demand and exports to the rest of Asia. The key …
21st February 2011
Malaysia posted its fastest annual GDP growth for a decade last year, and we expect the economy to expand at a healthy pace in 2011. Tough conditions in the West are likely to weigh on exports and industry, but domestic demand should lead the way. Price …
Vietnam’s central bank hiked its policy rate by a larger-than-expected 200bp to 11% today, which follows on from last week’s devaluation of the dong against US dollar. It appears that policymakers are finally getting serious about addressing the …
17th February 2011
Q4 GDP figures were revised lower today, as expected, but the economy nonetheless grew by a spectacular 14.5% in 2010 as a whole. GDP growth is likely to be robust this year and will increase the threat of inflation rising further. The upshot is that the …
Yesterday’s wholesale prices data show headline inflation is falling. But inflation remains too high for comfort so we continue to expect the Reserve Bank (RBI) to raise rates by a further 50bp by mid-2011. That may, however, be the end of the tightening …
15th February 2011
Singapore announces its latest budget on Thursday, and we anticipate that the key measures will include supports for low-income groups to cope with higher food and fuel prices. In addition, the budget will likely also focus on strategic initiatives to …
14th February 2011
The Bank of Korea (BoK) unexpectedly held its policy rate at 2.75% today. Nonetheless, core inflation has surged and looks set to climb further while GDP growth should pick up too. The upshot is that more policy tightening is inevitable. We expect the …
11th February 2011
Vietnam’s central bank today devalued the reference rate for the dong by around 9%. The move was bigger than expected but long overdue. To be a success, today’s adjustment has to be complemented soon by a decisive tightening of monetary policy as well as …
The Philippines’ central bank (BSP) kept its policy rate unchanged at 4.0% today, as expected. We are sticking with our long-held view that rates need to move up this year to ensure that inflation pressures remain contained. We continue to expect a first …
10th February 2011
Indian equities have fallen sharply since mid-November and the pain will probably continue for a few more months yet. Nevertheless, we anticipate that the Reserve Bank’s monetary policy tightening will be largely over by mid-2011 and that the slowdown in …
