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Rebounding won An easing of inflation pressures in the US along with China’s reopening have provided a boost to Asian currencies over the past couple of months. The biggest rebound has been in the Korean won, which has now appreciated by 17% against the …
20th January 2023
Bank Indonesia (BI) today raised interest rates by a further 25bps (to 5.75%) but also appeared to signal there would be no further rate increases this year. We are changing our forecast in response, and now think the tightening cycle has come to an …
19th January 2023
Malaysia’s central bank (BNM) unexpectedly left its main policy rate unchanged today (at 2.75%), but appeared to leave open the possibility of further rate hikes later in the year. However, with growth set to slow and inflationary pressures easing, we …
Bank Indonesia tightening cycle at an end Bank Indonesia (BI) today raised interest rates by a further 25bps (to 5.75%) but also appeared to signal there would be no further rate increases this year. We are changing our forecast in response, and now …
Rates on hold, end of the tightening cycle Malaysia’s central bank (BNM) unexpectedly left its main policy rate unchanged today (at 2.75%), but appeared to leave open the possibility of further rate hikes later in the year. However, with growth set to …
Taiwan’s economy unexpectedly contracted in Q4, driven by a sharp fall in exports. We expect the economy to remain weak over the coming quarters as exports struggle amid a global recession and higher interest rates weigh on domestic demand. According to …
18th January 2023
Economy set to remain weak Taiwan’s economy unexpectedly contracted in Q4, driven by a sharp fall in exports. We expect the economy to remain weak over the coming quarters as exports struggle amid a global recession and higher interest rates weigh on …
Implications of a stronger recovery in China COVID-19 has spread through China much faster than we had expected, with one province reporting that 89% of the population has been infected with the virus. This is paving the way to a much earlier economic …
13th January 2023
The Bank of Korea today raised interest rates by a further 25bps (to 3.50%) and relatively dovish comments by Governor Rhee support our view that the tightening cycle is now over. With growth set to struggle and inflation likely to fall back further, we …
Final rate hike of the cycle The Bank of Korea today raised interest rates by a further 25bps (to 3.50%), but with price pressures easing and economic growth slowing sharply, we think this will be the last hike of the cycle. Today’s decision came as …
Forecast change on China border reopening Tourism across Asia has rebounded strongly in recent months, with arrivals in most places now at around 45% of pre-crisis levels. (See Chart 1.) Chart 1: Tourist Arrivals (% of 2019 level) Sources: Refinitiv, …
6th January 2023
China’s abandonment of its zero-COVID policy could lead to supply chain disruption in other EMs, particularly other parts of Asia and Mexico, though we’re not too concerned yet. And outbound Chinese tourism is likely to soar, to the benefit of Hong Kong …
4th January 2023
Further weakness ahead Manufacturing PMIs across the region rose slightly in December but remained weak overall. We continue to expect weaker global demand, high inflation and interest rates to drag on manufacturing ahead. December PMIs have been released …
3rd January 2023
Growth slowed sharply in the first two months of Q4 and we expect a further slowdown over the coming months as high inflation, multi-decade high interest rates and weaker global demand weigh on prospects. The flash estimate for Q4 GDP, largely computed …
The economy is likely to teeter on the brink of recession in 2023 Economic growth slowed sharply during the first two months of the fourth quarter and we think a further slowdown is likely over the coming quarters. The flash estimate for Q4 GDP, largely …
Recent trade data from Emerging Asia have been downbeat and, with the global economy heading for recession, worse is still to come. China, Taiwan, Korea and Singapore all reported big falls in exports in November. For the region as a whole, we estimate …
23rd December 2022
Bank Indonesia (BI) today raised interest rates for a fifth consecutive meeting, but slowed the pace of tightening with a 25bp hike (to 5.50%). With inflation still well above target, the central bank has more work to do. But provided the currency …
22nd December 2022
Bank Indonesia slows pace of tightening, but further hikes are likely Bank Indonesia (BI) today raised interest rates for a fifth consecutive meeting but slowed the pace of tightening by raising interest rates by just 25bps (to 5.50%) from 50bp at its …
The past few weeks have brought mostly good news on the inflation front, with the headline rate dropping back in most countries in November. (See Chart 4.) Less encouragingly, however, core inflation has continued to rise and is now at multi-year highs …
20th December 2022
Tourism boost and risk of factory disruption Chinese authorities appear to have given up on efforts to contain the spread of COVID-19 much earlier than we had previously anticipated. (See here .) We suspect that China’s economy will experience a …
16th December 2022
This is part of a series of reports outlining our key macro and market calls for 2023. Click here to view the full series. Our latest EM Outlook can be found here . EMs will experience one of the broadest slowdowns in GDP growth in 2023 since the 1990s. …
15th December 2022
Taiwan’s central bank (CBC) today raised its main policy rate by 12.5bps (to 1.75%) but with inflation easing and growth set to struggle, we expect this hike to have marked an end to the tightening cycle. Today’s decision was in line with expectations. Of …
The central bank in the Philippines (BSP) today raised its main policy rate by 50bps (to 5.50%), but with Governor Felipe Medalla sounding more dovish than expected on inflation, we think the tightening cycle will be over soon. The decision was exactly in …
End of the tightening cycle Taiwan’s central bank (CBC) today raised its main policy rate by 12.5bps (to 1.75%) but with inflation easing and growth set to struggle we expect this hike to have marked an end to the tightening cycle. Today’s decision was in …
Tightening cycle nearing an end The central bank in the Philippines (BSP) today raised its main policy rate by a further 50bps (to 5.50%), but with Governor Felipe Medalla sounding more dovish than expected on inflation, we think the tightening cycle will …
Click here to read the full report. Overview – Economic growth will slow sharply in most of the region in 2023 as higher interest rates and weaker exports drag on demand. Our GDP growth forecasts are below consensus in most countries. With inflationary …
13th December 2022
Inflation still rising in the Philippines The past week has brought mostly good news on the inflation front. Of the nine countries in the region to have reported November inflation figures, the y/y rate dropped or was stable in eight of them. (See Chart …
9th December 2022
Weak data, slowing inflation, dovish BoK A string of weak activity data, a sharp drop in inflation and dovish comments from the central bank support our view that the Bank of Korea’s tightening cycle is coming to an end soon. The final estimate of third …
2nd December 2022
Further weakness ahead Manufacturing PMIs across the region fell further into contractionary territory in November, driven by a sharp decline in the employment index. We expect conditions to remain subdued as weaker global demand, high inflation and …
1st December 2022
The Bank of Thailand hiked interest rates today by a further 25bps (to 1.25%), and reiterated that it is likely to continue tightening policy gradually over the coming months. The decision was correctly predicted by 17 out of the 19 analysts polled by …
30th November 2022
Thailand: gradual tightening cycle to continue The Bank of Thailand hiked interest rates today by a further 25bps (to 1.25%), and reiterated that it is likely to continue to tighten policy gradually over the coming months. The decision was correctly …
Most countries in the region have now reported GDP figures for the third quarter, and growth was generally faster than we (and the consensus) had expected. One factor behind this resilience was the strength of private consumption, which held up well in …
29th November 2022
Strike highlights need for labour market reform The costs of a strike by Korean truck drivers – the second this year – are starting to mount, with steel and cement producers reporting disruption. The Korean government estimated that the economic losses …
25th November 2022
Inflation appears to have finally peaked for emerging markets – but how quickly will price pressures now ease, and what will that mean for the 2023 outlook? In December's monthly dive into the big stories in EM macro and markets, economists from across …
24th November 2022
Malaysia’s new prime minister, Anwar Ibrahim, lacks a majority in parliament and his appointment is unlikely to bring to an end the political instability and uncertainty that has held Malaysia’s economy back since 2018. Just keeping the government …
The Bank of Korea (BoK) today raised interest rates by a further 25bps (to 3.25%) and the accompanying hawkish statement suggests the tightening cycle still has a little further to run. We are tweaking our forecasts for next year and now expect one more …
The Bank of Korea today raised interest rates by a further 25bps (to 3.25%), but with growth slowing and inflation easing, we think there is a good chance this marks the end of the central bank’s tightening cycle. Today’s decision came as little surprise …
Revised GDP data confirm that the economy rebounded strongly in the third quarter. However, we don’t expect this strength to last. A combination of weaker global growth, high inflation and tighter monetary policy will weigh heavily on activity over the …
23rd November 2022
Thailand’s economy accelerated in the third quarter on the back of a surge in service exports. Although the global downturn and higher interest rates will weigh on prospects, we expect growth to hold up relatively well over the coming quarters as …
21st November 2022
Growth to hold up (relatively) well Thailand’s economy accelerated in the third quarter on the back of strong consumer spending and investment activity. Although the global downturn and higher interest rates will weigh on prospects, we expect growth to …
Rebound in Asian currencies unlikely to last The rebound in Asian currencies triggered by the weaker-than-expected US CPI data for October already appears to be running out of steam. A number of currencies, including the won and the rupiah, have dropped …
18th November 2022
Bank Indonesia (BI) today raised interest rates by a further 50bps (to 5.25%) and we think further hikes are likely as the central bank looks to support the rupiah and clamp down on inflation. In its press conference the central bank stated that …
17th November 2022
The central bank of the Philippines (BSP) today raised its main policy rate by a further 75bps (to 5.0%), and we think further tightening is likely in the near term. But with inflation having probably peaked, headwinds to the recovery mounting and the …
More hikes coming in Indonesia Bank Indonesia (BI) today raised interest rates by a further 50bps (to 5.25%) and we think further hikes are likely as the central bank looks to support the rupiah and clamp down on inflation. While a rate hike today was …
Further hikes likely in the near term, but tightening cycle to be over by early next year The central bank of the Philippines (BSP) today raised its main policy rate by a further 75bps (to 5.0%), and we think further tightening is likely in the near term. …
Malaysia heads to the polls on Saturday for a general election which, if the latest opinion polls are correct, will lead to a further period of unstable and fractured politics. This reduces the chances of meaningful economic reforms being passed and …
16th November 2022
Below consensus growth for Taiwan in 2023 Surging demand for electronics products helped Taiwan’s economy sail through the pandemic. But with this tailwind now turning into a headwind, growth looks set to slow sharply. Export volumes have fallen back …
11th November 2022
Malaysia’s economy slowed in Q3, and we think growth will struggle over the coming quarters as lower commodity prices, weaker global demand and tighter monetary policy drag on prospects. According to figures published today, economic growth slowed to 1.9% …
Growth likely to decelerate further The economy slowed sharply during the third quarter, and we think growth will ease further over the coming quarters with lower commodity prices, weaker global demand and tighter monetary policy set to drag on prospects. …
The Philippines economy rebounded in the third quarter of the year, but we expect growth to slow over the coming months as high inflation, rising interest rates and weaker global demand weigh on prospects. GDP grew by 2.9% in seasonally-adjusted q/q terms …
10th November 2022
