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Indonesia: hiking cycle to be gradual

Bank Indonesia left interest rates unchanged at 3.5% at its meeting today, but the decision to raise the reserve requirement ratio (RRR) from March suggests that rate hikes will come sooner than we had previously expected.
Gareth Leather Senior Asia Economist
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Emerging Asia Economics Update

Pakistan: Further tightening needed, as IMF talks begin

High inflation and the fall in the currency were the two key factors behind the State Bank of Pakistan’s (SBP) decision to raise interest rates by a further 150bp today. More tightening looks inevitable, and much will depend on whether the government can agree terms with the IMF over the resumption of its US$6bn loan programme. Asia Drop-In (26th May, 0900 BST/16:00 SGT): Can Asia remain the low inflation exception? Join our 20-minute briefing about the region’s price and policy outlooks. Register here.

23 May 2022

Emerging Asia Economics Weekly

Asia late to tightening but won’t have to go far

Central banks in India, the Philippines and Malaysia have all raised interest rates for the first time this cycle in recent weeks, and we expect further hikes next week in Indonesia, Korea and Pakistan. But with inflation set to fall back in the second half of the year and growth likely to weaken, tightening cycles are unlikely to be aggressive. Our forecasts are generally more dovish than the consensus.
Asia Drop-In (26th May, 0900 BST/16:00 SGT): Can Asia remain the low inflation exception? Join our 20-minute briefing about the region’s price and policy outlooks. Register here.

20 May 2022

Emerging Asia Economics Update

Philippines: central bank will tighten gradually

The central bank in the Philippines (BSP) started raising interest rates today, but with inflation set to slow later in the year and the economic recovery likely to weaken, the tightening cycle is set to be gradual and relatively short. Asia Drop-In (26th May, 0900 BST/16:00 SGT): Can Asia remain the low inflation exception? Join our 20-minute briefing about the region’s price and policy outlooks. Register here.

19 May 2022

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Emerging Asia Economics Update

What to expect in Emerging Asia in 2022

Asia will be – contrary to consensus expectations for widespread hikes – the only EM region in which the median central bank isn’t tightening this year.

10 January 2022

Emerging Asia Economics Update

A guide to political events in 2022

Korea, the Philippines and India are each holding elections this year that will play a role in setting fiscal and structural reform priorities, including the possible introduction of a universal basic income in Korea. And China looks set to tear up the leadership succession rules that have contributed to its unusual stability as an autocracy over recent decades. In view of the wider interest, we are also making this Emerging Asia Economics Update available to clients of our India and China services.

10 January 2022

Emerging Asia Chart Book

What Omicron means for monetary policy in Asia

Most countries in Emerging Asia have now recorded cases of Omicron, and the experience from elsewhere in the world suggests that it is only a matter of time before there is widespread community transmission of the new variant. Many places have already introduced new border controls and it seems likely that restrictions on domestic activity will be tightened over the coming weeks. We will be reviewing our GDP growth forecasts ahead of the publication of our Q1 2022 Outlook next month. In terms of monetary policy, the downside risks to growth posed by Omicron reinforce our view that most central banks in Asia will keep interest rates low next year.

22 December 2021
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