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Vietnam: Is the worst over?

With cases of COVID-19 in Vietnam falling sharply and the government easing restrictions, factories are starting to reopen, and the latest data suggest the worst is now over for the country’s manufacturing sector. However, with backlogs of work mounting up, disruption is likely to last for some time.
Gareth Leather Senior Asia Economist
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Emerging Asia Data Response

Singapore GDP (Q1, revised)

The decent upwards revision to Q1 GDP data reveals that the economy gained more momentum at the end of the quarter, a trend which is likely to carry on throughout Q2. 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.

25 May 2022

Emerging Asia Economics Update

Dovish Bank Indonesia in no hurry to raise rates

Bank Indonesia left interest rates unchanged today and the dovish tone from the press conference suggests the central bank is in no rush to tighten policy. We are maintaining our view the central bank will raise interest rates by just 25bps this year. 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.

24 May 2022

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

More from Gareth Leather

Emerging Asia Economics Weekly

PacMan joins the race, baht set for further falls

The next presidential election in the Philippines is not until May, but the contest is already generating plenty of headlines with former boxing world champion Manny Pacquiao (PacMan to his fans) this week announcing his intention to run. He is joined by several other presidential hopefuls, including a former actor and two children of former presidents. We will have more to say once the candidates outline their policy platforms, but the uninspiring list of presidential hopefuls bodes poorly for the country’s prospects. Meanwhile, policymakers in Thailand appear unfazed by the recent decline in the baht, which fell by over 4% against the US dollar last month. We think further weakness is likely over the coming year.

1 October 2021

Emerging Asia Chart Book

Asian central banks in little rush to raise rates

Over the past month or so, the central banks of Korea, Pakistan and Sri Lanka have all raised interest rates, but we don’t think other countries will be in any rush to follow suit. There is certainly little to worry about on the inflation front. Pakistan, India and Sri Lanka are the only three countries where headline inflation is above 5% y/y. With GDP still well below potential in most parts of the region, underlying price pressures will remain subdued. Similarly, with the exception of Sri Lanka and Pakistan, where large current account deficits are putting downward pressure on currencies, external factors are unlikely to prompt central banks into hiking rates. Although the US Fed is likely to announce plans to taper its asset purchases later this year, large current account surpluses mean Asian economies are well placed to withstand any sudden shift in capital flows that tighter monetary policy in the US could trigger. Meanwhile, unlike in Korea, there is no sign elsewhere in Asia that low interest rates are fuelling a rise in financial risks. Credit growth has slowed in many countries, with policymakers in Indonesia and the Philippines encouraging commercial banks to lend more. Finally, most countries still have large output gaps, and with the virus continuing to cause significant economic disruption across the region, central banks will remain keen to support economic activity.

29 September 2021

Emerging Asia Economics Update

Thailand: rates to stay low for an extended period

The Bank of Thailand (BoT) left interest rates on hold today at 0.5%, and we have taken out the rate cut we originally had pencilled in for this year. However, rate hikes are still a long way off.

29 September 2021
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