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Taiwan in the cross hairs

Ongoing disruption to global auto production has highlighted the extent to which semiconductors have become an essential input in products that aren’t traditionally considered electronics and also how dependent the world is on Taiwan to produce them. This dependency poses a threat to the global economy that can be mitigated but won’t be fully addressed in the foreseeable future.
Mark Williams Chief Asia Economist
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Emerging Asia Chart Book

Thai economy to receive tourism boost

After more than two years in the doldrums, Thailand’s tourism sector is finally showing signs of life. Arrivals in May reached 520,000 – a 77% increase from the previous month and 19% of the level reached in the same month of 2019. Spending by foreign tourists was equivalent to over 10% of GDP before the pandemic began, and a steady recovery in the sector will provide an important boost to the struggling economy – Thailand was the only major country in the region where GDP was still below its pre-pandemic level in the first quarter. A stronger recovery should provide the central bank with the confidence it needs to begin tightening monetary policy. Despite surging inflation, the Bank of Thailand has been one of the few central banks in the region not to hike rates this year as it has prioritised supporting the economy. Our forecast is that the BoT will finally raise interest rates at its August meeting. Asia Drop-In (30th June, 09:00 BST/16:00 SGT): Are Asia’s central banks behind the curve? Can the Bank of Japan and People’s Bank of China continue to go against the grain? Find out in our special session on what global monetary tightening looks like in Asia. Register now.  

27 June 2022

Emerging Asia Economics Weekly

Singapore overheating fears, BSP forecast change

There are growing signs that Singapore’s economy is overheating, with inflation now nearly double the target and wages increasing rapidly. However, we do not expect the MAS to respond by tightening monetary policy further. We expect growth to slow in the second half of the year, which should help to cool underlying price pressures, while a reopening of the international border should help to ease labour shortages. Asia Drop-In (30th June, 09:00 BST/16:00 SGT): Are Asia’s central banks behind the curve? Can the Bank of Japan and People’s Bank of China continue to go against the grain? Find out in our special session on what global monetary tightening looks like in Asia. Register now.  

24 June 2022

Emerging Asia Economics Update

Low inflation means BI is in little hurry to raise rates

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23 June 2022

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Changing views on China, export demand peaking

While China’s Communist Party was celebrating its achievements at its official centenary this week, a global survey revealed a sharp decline in popular enthusiasm for economic engagement with China in developed economies. That suggests that if governments in the West push for decoupling, they’ll find the public is receptive.

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China is about to flood EMs with vaccines

By September, China could be in a position to export 340mn vaccines doses each month – more than most regions of the world have administered in total so far. China’s vaccines are less effective than others, but have been found to suppress outbreaks where they have been used if a high enough share of a population is vaccinated. Large-scale exports from China could therefore give a significant boost to the prospects of many EMs now struggling to vaccinate because of a lack of vaccine supply.

17 June 2021

Emerging Asia Economics Update

Taiwan: severe capacity constraints but few inflation fears

Taiwan’s economy is struggling with severe capacity constraints but there are few signs in recent data that this is fuelling broad-based wage or price pressure. That’s a stark contrast with the US, and should provide some reassurance to central bankers not just in Taipei but also further afield that economic recoveries, even if strong, won’t necessarily trigger inflation.

10 June 2021
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