Taiwan: outbreak to weigh on consumption

The first major outbreak of COVID-19 in Taiwan has triggered the first significant restrictions on activity. Consumer spending will suffer, but the rest of the economy should still perform strongly.
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Emerging Asia Economics Weekly

Korean labour market not as healthy as it looks

At face value, the Korean labour market figures for December paint an encouraging picture, with total employment rising to a new record high. However, a detailed examination of data reveals just how dependent the labour market has become on government support, which may not be sustained if the opposition PPP win March’s presidential election.

14 January 2022

Emerging Asia Economics Update

Bank of Korea turning even more hawkish

The Bank of Korea (BoK) is far from done, after making its first back-to-back rate hike since 2007 today. We now expect a total of four 25bp hikes in 2022, taking the policy rate to 2.00%.

14 January 2022

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

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Emerging Asia Economics Weekly

August rate hike in Korea, Indonesia outbreak

We were already more hawkish that the consensus in expecting a rate hike in Korea this year, but recent comments by the central bank and strong economic data mean we are shifting forward our forecast for the first hike to the Bank of Korea’s meeting on 26th August. Meanwhile, Indonesia’s government has introduced tough new restrictions to combat a jump in virus cases. Despite the worsening outlook, there is little prospect of monetary or fiscal policy being loosened further to support demand.

25 June 2021

Emerging Asia Economic Outlook

Resurgent infections threaten recovery

Asia’s emergence from the pandemic has been threatened recently by a resurgence in infections across parts of the region. Most of South Asia, the Philippines and Thailand have had to introduce new restrictions to contain outbreaks of the virus, and we have cut our growth forecasts for a number of countries to reflect the worsening outlook. Elsewhere, China and Taiwan have already fully recovered from the crisis, while Vietnam is not far behind. Headline y/y growth rates in these economies will be flattered by base effects over the next couple of quarters, but in q/q terms growth will continue to slow. Central banks across the region are in no rush to tighten monetary policy. External factors won’t compel policymakers to tighten, and with inflationary pressures very weak, interest rates are likely to be kept low to support economic recoveries.

21 April 2021

Emerging Asia Economics Weekly

Taiwan’s semiconductor boom, Korea uncertainty

Booming demand for semiconductors is prompting us to raise our Taiwan growth forecast for this year from 4.5% to 5.0%. This is well above the consensus of just 4.2%. Meanwhile, labour market data provide further signs that Korea’s economy improved at the end of last quarter.

16 April 2021
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