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.
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Emerging Asia Economic Outlook

Central banks in no hurry to tighten

Omicron should prove no more than a small stumbling block for Asia. Our forecasts are for above-trend and above-consensus growth in most countries this year. India, Indonesia and Korea are likely to raise interest rates in 2022, but with inflationary pressures in most countries set to ease, other major economies will be in no hurry to tighten.

25 January 2022

Emerging Asia Economics Update

Surprise move by the MAS likely not its last in 2022

The Monetary Authority of Singapore’s (MAS) surprise move to tighten policy today, ahead of its usual April meeting, probably won’t be its last. We think the added uplift to inflation from a domestic outbreak of Omicron will force the MAS to tighten again this year.

25 January 2022

Emerging Asia Data Response

Korea GDP (Q4, provisional)

While Omicron means that the strong GDP growth recorded in Q4 2021 is unlikely to be repeated this quarter, the recovery should be back on track before long. With the economic outlook still upbeat, the Bank of Korea is set to continue tightening over the quarters ahead. Drop-In (08:00 GMT, 27th Jan): China Outlook – Cyclical trough, tepid rebound. Join Mark Williams and Julian Evans-Pritchard for a discussion about China’s economic and policy outlook this year. Register here.

25 January 2022

More from Emerging Asia Economics Team

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 Economics Update

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.

17 May 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
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