South East Asia: hit from Delta will be slow to fade

There are some signs that the Delta outbreak battering South East Asia is at least past its worst. But a rapid turnaround in the region’s economic fortunes looks unlikely.
Alex Holmes Emerging Asia Economist
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Emerging Asia Data Response

Korea Activity Data (Oct.)

Korea’s economy is likely to have already rebounded from the downbeat October revealed in activity data today. But prospects for continued improvements have diminished, as a resurgence in virus cases pushes back the timeline for reopening the economy further.   Drop-In: India – How much scarring will the pandemic leave? 10:00 ET/15:00 GMT, Wednesday 1st December Drop-In: Why is Asia sitting out the global inflation surge? 09:00 GMT/17:00 HKT, Thursday 2nd December

30 November 2021

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 Drop-In: India – How much scarring will the pandemic leave? 10:00 ET/15:00 GMT, Wednesday 1st December

26 November 2021

More from Alex Holmes

Emerging Asia Economics Update

Bank of Korea to continue tightening into 2022

We were among the first forecasters to call that the Bank of Korea (BoK) would begin tightening monetary policy this year and it duly delivered today, raising the policy rate by 25bps to 0.75%. Given the hawkish comments in the press conference, we now think the next hike will come in November. And we expect the tightening cycle to continue well into 2022.


26 August 2021

Emerging Asia Data Response

Korea Trade (1st - 20th August)

Korean export values look set to hold steady at elevated levels in August. With few signs of a drag from virus disruptions, the levelling off in exports probably instead reflects a plateau in final demand.

23 August 2021

Emerging Asia Economics Update

Malaysia: major challenges await new PM

Malaysia’s new prime minister, Ismail Sabri Yaakob, takes over an economy poised to rebound strongly from the COVID-19 pandemic. But the new government looks ill-equipped to deal with the many long-term challenges facing the country.

20 August 2021
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