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The Bank of Thailand (BoT), in a surprise move earlier today, lifted its policy rate by 25bp to 2.0%. Domestic demand is well placed to lift GDP growth during the course of 2011, which means that fighting inflation and ensuring that asset bubbles do not …
1st December 2010
The post-recession rebound in most of Latin America is showing signs of slowing but growth is likely to remain fairly strong over the coming quarters. We still expect the region to expand by around 4.0% next year, compared to growth of just 1.6% in the …
Q3 GDP data in India, published today, showed that the economy continued to expand at a rapid pace. The upswing will probably stay strong and slowing inflation will remain the top policy priority. We continue to anticipate that the repo rate will be …
30th November 2010
The central bank in Pakistan (SBP) today lifted its discount rate by 50bp to 14.0%, as we had expected. The annual gain in consumer prices should peak in coming months and inflation pressures from the fiscal policy overrun should ease. Accordingly, we …
29th November 2010
This week’s Q3 GDP data in India will probably show that growth slowed in y/y terms to 8.6%. Nevertheless, our estimate of the GDP trend in q/q seasonally-adjusted terms suggests that growth accelerated sharply relative to Q2. The upshot is that we expect …
Q3 GDP in the Philippines, published today, was down in q/q terms. We were the only one of those surveyed by Bloomberg to forecast that there would be a contraction, but we remain positive on the outlook. The private sector is well-placed to lift GDP …
25th November 2010
Sri Lanka’s budget for 2011, announced today, aims to sustain the upswing by cutting taxes and by lifting private sector investment. While GDP growth will probably stay rapid next year, the budget reforms do not look bold enough to significantly reduce …
22nd November 2010
Q3 GDP data in Malaysia, released today, were weaker than expected, as was the case with the figures from Thailand. Nevertheless, the big picture is the same in both countries. The expansion is shifting to a pace which can be sustained and there has not …
Today’s Q3 GDP data for Thailand were weak but growth is just adjusting to what is normal and can be sustained. What’s more, most of the slowdown has probably now come through. We expect the economy to pick up speed again in coming quarters. Our view on …
Q3 GDP data are released in Thailand on Monday and will probably show that the economy contracted in q/q terms. However, this should be viewed as just part of the inevitable adjustment to an expansion pace which is more normal and can be sustained. The …
The Philippines’ central bank (BSP) kept its key policy rate unchanged at 4.0% today, as expected. The strong peso is doing some of the heavy-lifting for the BSP, but rates will probably need to move up during 2011 to ensure that inflation stays …
18th November 2010
The upward revisions to Singapore’s Q3 GDP figures, published today, were small. The data will stay wild for some time yet and the economy will expand at a far slower pace in 2011 than will be the case this year. Nevertheless, the upswing will continue …
The Bank of Korea (BoK) hiked its policy rate by 25bp to 2.5% today, in a move we had expected but which surprised the Bloomberg consensus. The economy should regain momentum over the next 12 months while inflation is likely to stay close to the ceiling …
16th November 2010
The Central Bank of Sri Lanka (CBSL) kept its policy rates on hold at today’s meeting, as expected. Inflation has accelerated but is unlikely to reach a problem-pace any time soon. However, GDP growth will probably stay rapid too and overheating pressures …
S&P on Friday lifted the Philippines’ sovereign foreign currency debt rating from BB- to BB. The move reflects the strong balance of payments, the implementation of new reforms which will lift trend GDP growth, and the improvements on the fiscal side …
15th November 2010
Industrial output growth slowed sharply in September while the annual gain in wholesale prices eased a little in October. The Reserve Bank (RBI) has already made it clear that policy rates will almost certainly remain unchanged for the next three months …
The Bank of Korea meets on Tuesday and, we judge, will probably lift its 7-day repo rate by 25bp to 2.5%. GDP growth has inevitably slowed given the tougher global environment but domestic demand is continuing to expand at a reasonable pace. What’s more, …
Bank Negara Malaysia (BNM) left policy interest rates unchanged today at 2.75%, as expected. The slowdown in GDP growth probably has further to go but we still anticipate that the upswing will regain some traction during the course of 2011. Inflation …
12th November 2010
The latest budget projections published today confirm that Australia’s fiscal position is exceptionally strong when compared to other high-income economies. The overall budget will move back into surplus from 2012-13 while government debt is set to stay …
9th November 2010
Malaysia’s central bank (BNM) meets to set policy interest rates on Friday and will likely leave the overnight rate unchanged at 2.75%. The economic upswing is losing some momentum and inflation will probably stay contained for a while. What’s more, by …
8th November 2010
Emerging market economies will continue to grow rapidly over the next few years. But with current account surpluses in most of Asia and among oil producers likely to remain high, this will not be of much benefit to the developed world. What’s more, while …
Vietnam’s central bank (SBV) lifted its policy rate by 100bp, to 9%, late on Friday. The adjustment is a step in the right direction but far more has to be done to ensure that inflation slows to the regional average. Fiscal consolidation needs to be more …
The G20 Summit in Korea next week (11th – 12th) will be overshadowed by the fall-out from “currency wars”, hampering any attempt at the improved coordination of policies necessary to help rebalance the global economy. In particular, the US will find it …
5th November 2010
Data published today show that Indonesia’s GDP growth eased to 5.8% y/y in Q3. The slowdown is due to one-off factors and is not a cause for concern. Economic growth will stay strong in coming quarters with investment leading the way. Fiscal consolidation …
Capital inflows into Emerging Asia stock markets were high in October and will probably stay strong in coming months. This huge challenge will continue to be managed through the combination of more currency appreciation and more foreign exchange market …
4th November 2010
It was no surprise that Bank Indonesia (BI) today left the repo rate unchanged at 6.5%. But BI has become more hawkish on the outlook for inflation despite the prospect that the rupiah will appreciate further. Accordingly, we continue to expect that the …
October data from Vietnam have brought a sharp acceleration in annual inflation and another increase in the merchandise trade deficit. Nevertheless, the authorities continue to target faster credit growth and a more rapid GDP gain. It would be best if …
2nd November 2010
Singapore’s labour market stayed strong in Q3 while the October manufacturing sector PMI, published today, picked up and suggests that the slowdown in industry and exports is close to bottoming out. GDP growth next year will probably be around the trend …
The Reserve Bank of Australia (RBA) unexpectedly hiked its cash rate by 25bp to 4.75% today. While the exact timing was a surprise, the resumption of monetary tightening was only a matter of when, not if. There is little spare capacity and the economy …
The Reserve Bank of India (RBI), as expected, today lifted both the repo rate and reverse repo rate by 25bp. However, inflation will probably slow soon and the RBI is increasingly concerned about high capital inflows and rupee appreciation. In addition, …
Thailand data published late last week and earlier today show that activity continues to expand at a brisk pace while inflation remains low. The GDP expansion should stay on track in 2011 and the focus will shift toward containing inflation and back to …
1st November 2010
Manufacturing PMIs for Asia’s smaller economies and Australia generally declined further in October. The impact of tough external conditions in the US and Europe will continue to come through in coming months but intra-regional trade will eventually limit …
The Reserve Bank of India (RBI) will probably lift its two policy rates by another 25bp this week. Inflation remains too high while the economic upswing, although losing some momentum, is likely to stay generally strong. Nevertheless, the end of the …
Economic growth across Emerging Asia has continued to ease. However, this is just a return to what is normal and can be sustained rather than the start of a prolonged and severe downturn. Rapid exchange rate appreciation has brought more policy measures …
29th October 2010
Yesterday’s Q3 consumer price data from Australia were softer than the Reserve Bank (RBA) and consensus had expected. Inflation pressures are still likely to rise over the long run but the RBA would face a presentation problem if the cash rate is moved up …
28th October 2010
The Reserve Bank of New Zealand (RBNZ), to no-one’s surprise, today kept policy rates unchanged at 3.0%. In coming months, we expect that the activity data will surprise on the upside while the RBNZ will likely become more concerned about inflation. …
Data published today show that Korea’s GDP growth slowed in Q3. The economy will stay on a slow track for some time and in 2011 overall now looks set to expand at a sub-trend pace. Nevertheless, the upswing should gain renewed traction during the course …
27th October 2010
All of the three major ratings agencies have recently announced that the Philippines’ sovereign foreign debt is under review for possible upgrade. We expect that at least one of the three will upgrade over the next three months. GDP growth should hold …
26th October 2010
Industrial production data released today in Singapore surprised on the upside and suggests that Q3 GDP will be revised to show a less severe drop when new figures are published in November. The outlook is increasingly tied to what happens in Asia rather …
Q3 GDP data will be released in Korea this week and are expected to show that the economy has lost some momentum. What’s more, the upswing will probably stay on a slower track in coming quarters. Exports and manufacturing will be held back by prolonged …
25th October 2010
The Bank of Thailand (BoT) held its policy rate at 1.75% today but maintained a tightening bias. Domestic demand looks well placed to drive GDP growth, while the strong recovery should increasingly push against capacity constraints and lift inflation. We …
20th October 2010
The Central Bank of Sri Lanka (CBSL) kept its policy rates on hold at today’s meeting, as expected. Inflation has ticked up in recent months but is unlikely to become a threat any time soon. For this reason, we continue to expect policy rates to remain on …
19th October 2010
The budget plans for 2011 announced in Malaysia late last week aim to ensure that the economic upswing continues and showed once again that the top priority was the implementation of new measures to improve the operating environment for business and lift …
18th October 2010
The Bank of Thailand (BoT) announces its policy rate decision on Wednesday. The repo rate has been hiked at the past two meetings, and we expect another 25bp increase to 2.0%. The surge in the baht obviously complicates monetary policy-making and the …
Inflation data published today in India showed that price pressures are still high while the recent weakness in the industrial production figures is probably overstated. We expect that the Reserve Bank (RBI) will lift both of its policy rates at the …
15th October 2010
The Bank of Korea (BoK) held its policy rate at 2.25% today, as expected. The economy is losing some momentum but growth should not stall, while the won is climbing and is doing some of the heavylifting in terms of tightening monetary policy. We now …
14th October 2010
The currency war has yet to pull in Singapore. Data released today showed a large q/q annualised drop in Q3 GDP but the big surprise was the decision of the Monetary Authority of Singapore to tighten policy further and allow for faster appreciation of the …
Public appearances in recent days have confirmed that Kim Jong-eun, the youngest son of Kim Jong-iI, has become North Korea’s new leader-in-waiting. It is good news for the region that a leadership transition is underway but there are lots of risks which …
13th October 2010
The Australian dollar is close to hitting parity against the US dollar, a level last reached in mid-1982. Interest rate differentials will probably remain the main driver of where the exchange rate moves, and should offset what happens to commodity prices …
12th October 2010
