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This report is only available as a PDF. Click to download. … Vietnam adjustment going well but more needed …
25th January 2010
Thailand has lagged the regional recovery but data from the end of last year, including December foreign trade released today, have been strong. We have therefore lifted our 2010 GDP forecast. Nevertheless, the upswing will still probably be sub-par …
19th January 2010
Philippines country credit risk will be in the spotlight over the next six months given that the 2010 borrowing requirement will probably hit record levels, and ahead of May’s presidential and congressional elections. However, increased volatility looks …
18th January 2010
This report is only available as a PDF. Click to download. … Korea set for high growth in 2010 …
The surge in December wholesale prices, published today, means that it is now a near-certainty that India will tighten monetary policy later this month. A hike in the cash reserve requirement already looked a done-deal at the 29th January Reserve Bank …
14th January 2010
The Bank of Thailand (BoT) kept its policy rate unchanged at 1.25% today, as expected. The upswing will probably be sluggish, but the BoT did start to prime the markets to expect rates to move up in 2010. We still forecast that a first hike will come …
13th January 2010
Malaysia’s November industrial output data, published today, were poor, as were November foreign trade data published last week. Nevertheless, we remain positive on the outlook. GDP growth should still climb y/y in Q4 and then accelerate to around 5% in …
11th January 2010
This report is only available as a PDF. Click to download. … Growth to stay strong in 2010 …
Bank Indonesia (BI) left its policy rate at 6.5% today, as expected, and kept its neutral bias. Nevertheless, we still believe that the risk of far higher inflation from keeping rates low for too long is much greater than the threat to the economic …
6th January 2010
Q4 GDP growth was high and inflation has picked up. Policy interest rates were kept on hold in late December but another upward move is likely soon. Balance of payments strains should ease this year, FX rate depreciation should stay orderly, and GDP …
5th January 2010
Today’s manufacturing Purchasing Managers’ Indices (PMIs) for December signal that Asia’s recovery remains on track. Exports and industrial output should continue to perform well in the coming months. … Asian PMIs point to continued …
4th January 2010
Singapore’s recovery stalled at the end of 2009 but the disappointment should be short-lived. Q4 GDP was down q/q because manufacturing continues to be thrown around by the highly volatile biomedicals sector. Singapore's upswing will resume in 2010 with …
Taiwan’s central bank left interest rates on hold today, as expected. With deflation still a lingering threat, interest rates will remain at their current level until well after they start to climb elsewhere in the region. … Taiwan rates to remain on …
24th December 2009
Today’s Q3 GDP data show that New Zealand’s recovery is continuing, albeit at a weaker pace than expected. We still expect a sustained and eventually strong upswing. However, the markets have moved too far in expecting a first Reserve Bank of New Zealand …
23rd December 2009
This report is only available as a PDF. Click to download. … Indonesia to hike policy rates in Q1 …
21st December 2009
The emerging Asia upswing is losing some momentum, as expected, but should still stay generally strong in coming quarters. The dilemma over what to do about high capital inflows will not go away, especially as policy rates will move up further across the …
17th December 2009
Today the Philippine central bank (BSP) left its policy rate unchanged at 4%, as expected, and retained a neutral bias. The economic upswing will almost certainly continue but inflation still looks set to stay low for a while, in part because the peso …
Today’s GDP data show that Australia’s recovery was sustained in Q3 on the back of solid domestic demand. Long-run prospects remain bright thanks to the mining boom, high population growth, and Australia’s rapidly expanding economic links with the rest of …
16th December 2009
This report is only available as a PDF. Click to download. … India rate hikes look close …
14th December 2009
Emerging markets have, on the whole, weathered the crisis in the global economy well. But 2010 will bring a fresh set of challenges. Overall, we think Asia is best placed to prosper, followed by Latin America and Brazil in particular. There are some …
11th December 2009
The Bank of Korea (BoK) left its policy rate at 2.00% today, as expected. More importantly, the Governor’s press conference commentary was hawkish and suggests that an interest rate hike is not far off. We maintain our view that policy rates will head …
10th December 2009
The Reserve Bank of New Zealand (RBNZ), as expected, left its cash rate at 2.5%. But it brought forward the first projected hike to mid-2010 after steadfastly insisting up to now that rates would probably not move until the “second half” of next year. …
This report is only available as a PDF. Click to download. … Korea’s recovery to hold strong …
7th December 2009
Bank Indonesia (BI) left its policy rate at 6.5% today, as expected, and gave no indication that it is thinking about raising rates soon. We believe that the risks to inflation from keeping policy rates too low for too long are far higher than the risks …
3rd December 2009
The Bank of Thailand (BoT) left its policy interest rate unchanged at 1.25% today, as expected. The economy is recovering but at a far slower pace than the rest of Asia. Thailand is also more reliant than elsewhere on continued high government spending, …
2nd December 2009
The Reserve Bank of Australia (RBA) raised its cash rate to 3.75% today, as expected. The accompanying policy statement shows that the RBA considers it has already made a “material adjustment” to rates and expects GDP growth to accelerate to trend next …
1st December 2009
India’s Q3 GDP, published today, surprised on the upside with manufacturing and services leading the way. The upswing will almost certainly stay strong and, as we have long signposted, policy rates will move up soon. This should be bad for government …
30th November 2009
This report is only available as a PDF. Click to download. … Is Australia’s outlook really that good? …
The emerging Asia upswing is losing some momentum but should stay generally strong in coming quarters. The dilemma over what to do about high capital inflows will not go away, especially as policy interest rates will move up across the region soon. …
25th November 2009
The change came a little earlier than we had expected, but today’s devaluation and policy rate hike in Vietnam was no surprise. The currency will probably fall further over the next 12 months even though policy rates are likely to rise much more. There …
Today’s 50bps policy rate cut by the State Bank of Pakistan was expected but, we believe, is likely to be the last cut in the current cycle. Politics is clearly a wildcard but the economy has stabilized under the IMF deal whilst inflation should bottom …
24th November 2009
We expect the upswing in emerging Asia to stay relatively strong in coming quarters. The more trade-dependent economies will be held back by the long drawn-out recoveries that are likely in the US and in Europe. But while Asia’s rebound may fade during …
Bank Negara, as expected, today kept policy rates unchanged and again indicated that it will keep rates on hold for a prolonged period. The economy is picking up but the upswing is more fragile than elsewhere in Asia, y/y consumer price deflation looks …
This report is only available as a PDF. Click to download. … Vietnam balance of payments concerns to ease …
23rd November 2009
A resurgence in revenue will cap China’s fiscal deficit at just 3% of GDP in 2009. Looking ahead, the Budget for 2010 could signal how committed the government is to economic rebalancing. … What happened to China’s fiscal …
20th November 2009
The evidence linking sharp asset price moves in Hong Kong to its tight dollar peg is weaker than many think. With the peg in place, asset price bubbles are a threat for the future. But a shift to an alternative currency regime would not be an improvement. …
19th November 2009
Bank Indonesia is weighing up the costs and benefits of implementing capital controls because of concerns over “hot money” coming into the economy. However, we doubt the authorities will do anything to significantly curb portfolio inflows. Whatever the …
There are many parallels between the current lending boom in China and that in the late-1980s which brought down Japan’s economy. But there are several reasons to think China will avoid the same fate. … Is China gearing up for its own lost …
18th November 2009
We are upgrading our forecast for Japanese GDP growth in 2010 from 3.0% to 3.5%. This is well above the latest published consensus forecast of around 1.5%, as well as the projections from the likes of the IMF (1.7%) and the OECD (1.8%). However, having …
16th November 2009
This report is only available as a PDF. Click to download. … Asian central banks moving towards the exit …
The Bank of Korea (BoK) left its policy rate at 2.00% today. We believe the economic upswing is well established and that the political pressures on the BoK to hold rates low will probably ease early next year. We now expect a first hike in January. The …
12th November 2009
Despite further evidence of economic strength, China’s monthly data for October suggested that commodity stockpiling is waning. Lending growth declined more than expected, but credit policy is set to remain supportive of the recovery for months yet. … …
11th November 2009
New Zealand’s economy is likely to struggle over the medium term after an initial strong bounce next year. We see its GDP growth being closer to the long drawn out recoveries we expect in the US and Europe than the impressive rebounds in the rest of Asia. …
10th November 2009
The falls in the main balances of Japan’s Economy Watchers Survey in October suggest that the recovery lost a little momentum at the start of the fourth quarter. Nonetheless, growth was probably unsustainably strong in the third quarter and these balances …
Indonesia’s Q3 GDP growth accelerated to 4.2% y/y and all the key indicators point to a further pick up in coming quarters, with domestic demand leading the way. We are very positive on the outlook and on the government’s ability to lock-in structural …
This report is only available as a PDF. Click to download. … How strong is private investment in China? …
9th November 2009
Today the Philippine central bank, as expected, left its policy rate unchanged at 4% and retained a neutral bias. Damage from recent storms has made the near term outlook more uncertain. But we still expect a strong GDP upswing which will lift inflation …
5th November 2009
Bank Indonesia (BI) left its policy rate at 6.5% today, as expected. The neutral bias was retained too, probably with the aim of trying to curb rupiah appreciation. Rupiah strength is relevant to the policy rates outlook but inflation is still likely to …
4th November 2009
The Reserve Bank of Australia (RBA) raised its cash rate to 3.50% today, as expected. We still expect another hike in December but this is now not much firmer than a 50:50 call. The bigger picture is that we believe the economy in 2010 will not be as …
3rd November 2009
October data released over the last few days show that Korea’s economy retained much of its momentum going into Q4. Capacity use is back at pre-crisis levels and house prices are still rising. The upshot is that the Bank of Korea will probably start to …
2nd November 2009
