Shortages to remain a drag on global manufacturing

There are growing signs that global demand for Asian consumer goods has peaked. Despite this, supply shortages look set to persist for some time amid growing evidence that surging virus cases across South East Asia are causing disruption to the region’s industrial sectors.
Gareth Leather Senior Asia Economist
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Emerging Asia Economics Weekly

Recent rate hikes not the start of a trend

Attention over the past week has been on the region’s more hawkish central banks, following rate hikes in Korea and Pakistan. Both countries, along with Sri Lanka (which unexpectedly left rates unchanged at its meeting on Thursday) are likely to raise interest rates further over the coming months. But these countries are very much the exception. For the rest of the region, we think interest rates will remain on hold as central banks look to keep monetary policy loose to support recoveries. Meanwhile, virus cases are rising again in Vietnam. While restrictions have been tightened, they have so far been fairly light touch, including a closure of bars and nightclubs and capacity limits on restaurants in some southern provinces. Nevertheless, the jump in cases will be watched closely by global carmakers, which were hit hard by the disruption from previous factory closures.   Drop-In: Why is Asia sitting out the global inflation surge? 09:00 GMT/17:00 HKT, Thursday 2nd December Drop-In: India – How much scarring will the pandemic leave? 10:00 ET/15:00 GMT, Wednesday 1st December

26 November 2021

Emerging Asia Economics Update

Bank of Korea to hike at least three more times in 2022

Today’s move by the Bank of Korea is likely to mark the second hike of at least five, in a tightening cycle that began in August and will extend well into next year.

25 November 2021

Emerging Asia Data Response

Singapore GDP (Q3, Revised)

Revised Q3 GDP data show that Singapore’s economy grew more strongly than first thought last quarter, and while containment measures mean the recovery is unlikely to have gained much momentum so far this quarter, a gradual reopening should see growth accelerate in the coming months.

24 November 2021

More from Gareth Leather

Emerging Asia Economics Update

Indonesia: rates set for prolonged hold

Bank Indonesia left its main policy rate on hold at 3.50% today, and signalled that rates are likely to remain low for the foreseeable future. We think the policy rate will remain unchanged until at least the end of next year.

19 August 2021

Emerging Asia Economics Focus

Korea: the next 30 years

Korea has performed relatively well through the pandemic, and we expect the economy to emerge from the crisis with little lasting damage. However, the long-run outlook is less promising. Although productivity growth is likely to accelerate, it will not do so by enough to compensate for a decline in the working age population. As a result, trend GDP growth will continue to slow.

17 August 2021

Emerging Asia Data Response

Thailand GDP (Q2)

The surprise rise in Thai Q2 GDP is unlikely to be repeated this quarter as cases surge and the vaccine rollout makes only slow progress. The tourism sector is still on its knees, meaning any recovery further ahead is set to be slow. We continue to expect further easing from the Bank of Thailand.

16 August 2021
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