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South East Asia rebounding, but disruption set to linger

Disruption to industrial activity across South East Asia has eased considerably in the past few weeks, helping to relax global supply constraints, especially in the automotive sector. However, a renewed surge in COVID infections in Vietnam deserves close attention. Drop-In: India – How much scarring will the pandemic leave? 10:00 ET/15:00 GMT, Wednesday 1st December https://event.on24.com/wcc/r/3535749/63CC51718846E8FF3D871827AC84AF1E?partnerref=report Drop-In: Why is Asia sitting out the global inflation surge? 09:00 GMT/17:00 HKT, Thursday 2nd December https://event.on24.com/wcc/r/3546145/A9D34EF592141BEFCAC819ADB40359D5?partnerref=report
Gareth Leather Senior Asia Economist
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Emerging Asia Economics Weekly

Better news on inflation, as growth disappoints

The recent national accounts data show most countries experienced a difficult second quarter. However, there was some more encouraging news on inflation – which already appears to have peaked in a few countries. With growth set to remain weak, and inflation likely to fall back further over the coming months, we are sticking with our view that the region’s tightening cycles will prove short lived.

12 August 2022

Emerging Asia Data Response

Malaysia GDP (Q2)

GDP growth in Malaysia edged down in q/q terms last quarter, and we expect a further slowdown over the coming quarters as commodity prices drop back and the boost from reopening fades.

12 August 2022

Emerging Asia Economics Update

Thailand: gradual tightening cycle ahead

The Bank of Thailand hiked interest rates today by 25bp (to 0.75%), but reiterated that the tightening cycle will be gradual. We are sticking with our view that the policy rate will peak at 1.5% next year.

10 August 2022

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Emerging Asia Chart Book

Omicron fears stall plans to reopen borders

Amid all the uncertainty caused by the arrival of Omicron, one thing we can say with some conviction is that the new variant is further bad news for the region’s beleaguered tourism industry. Up until last week, countries across Asia had been making slow but steady progress in reopening their international borders, and it is notable that Singapore and Malaysia today pressed ahead with plans to reopen their land border for the first time in nearly two years. Elsewhere in the region, however, countries are closing their doors again. Indonesia has reintroduced quarantine for all inbound travellers, while the Philippines and Japan have banned foreign visitors from entering the country. Singapore has also put on hold plans to open vaccinated travels lanes with the UAE, Qatar and Saudi Arabia. Most countries in the region have also introduced travel restrictions with southern Africa. The worsening prospects for regional tourism reinforce our view that after an initial reopening bounce in the final quarter of the year, economic recoveries will start to lose momentum in early 2022 and that policymakers will look to keep monetary policy loose for the foreseeable future to support demand.

29 November 2021

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 https://event.on24.com/wcc/r/3546145/A9D34EF592141BEFCAC819ADB40359D5?partnerref=report Drop-In: India – How much scarring will the pandemic leave? 10:00 ET/15:00 GMT, Wednesday 1st December https://event.on24.com/wcc/r/3535749/63CC51718846E8FF3D871827AC84AF1E?partnerref=report

26 November 2021

Emerging Asia Economics Focus

Why is inflation different in Asia?

Inflation hasn’t emerged as a concern across Emerging Asia in the same way it has in the rest of the emerging world, in part because food price inflation in Asia is much lower, but also because the region has experienced much less disruption from the pandemic than other EMs. Whereas central banks in Latin America and Emerging Europe will tighten monetary policy further over the coming months, interest rates in most of Asia will remain on hold.

22 November 2021
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