Filtered by Subscriptions: Asia Economics Use setting Asia Economics
Trump tariffs – impact will be manageable for most Following a flurry of trade deals agreed over the past couple of weeks and a new Executive Order last night, from next Friday (US time) most countries in Asia will face tariffs of 15-25% on their exports …
1st August 2025
We will be holding an online Drop-In next week to discuss the implications of recent US trade deals for regional supply chains, global fracturing, economic growth, and financial markets across Asia. To register click here . Limited impact from …
25th July 2025
Indonesia joined Vietnam this week in securing a trade deal with the US. The deal, based on Trump’s Truth Social post, will see US imports from Indonesia subject to a 19% tariff (compared to a tariff of 32% announced on “Liberation Day” in April which was …
18th July 2025
A damp squib Liberation Day 2.0 was largely shrugged off by investors, with most equity markets in Asia rising over the course of the week. This could be because tariff deadlines were extended by three weeks, giving countries more time to agree deals …
11th July 2025
Key questions left unanswered The trade agreement announced this week between the US and Vietnam, which imposes tariffs of 20% on Vietnam’s exports to the US (along with 40% for re-routed goods), leaves many questions unanswered. Not least how will …
4th July 2025
Boost for Korean consumers The weakness of consumer spending in Korea has continued in recent months, with retail sales now just over 2% below their pre-pandemic levels. (See Chart 1.) However, there are good reasons to think the worst is now over. …
27th June 2025
Growth boost for Korea More policy support in Korea looks to be on its way soon. According to the minutes of the Bank of Korea’s May meeting (when rates were cut a further 25bps) which were released earlier this week, Board members were united on the need …
20th June 2025
Price pressures continue to ease across Asia Inflation data published over the past week or so shows that price pressures across the region remained weak in May. (See Chart 1.) Thailand, Sri Lanka and China are in deflation, while the headline rate is …
13th June 2025
We are hosting an online briefing to discuss the outlook for India’s economy and financial markets. Sign up here . Korea: economy key challenge for President Lee One of the key challenges facing Korea’s newly-elected president, Lee Jae-myung of the …
6th June 2025
New president will have his work cut out Barring a major surprise, Lee Jae-myung of the Democratic Party (DP) will be elected as Korea’s president when the country votes on Tuesday. Polls have narrowed in the past couple of weeks but still give him a …
30th May 2025
MAS to loosen policy further GDP in Singapore contracted by 0.6% q/q last quarter according to the second estimate of national accounts figures published on Thursday. While this marked a slight improvement from the initial estimate (a 1.0% decline), it …
23rd May 2025
Slow progress on trade deals Monday’s agreement between the US and China to lower tariffs marks a significant de-escalation in tensions between the two countries. However, the deal addresses none of the issues that caused tensions to rise in the first …
16th May 2025
Asian exporters benefit from front-loading Asia publishes trade data much sooner than other regions which allows us to get an early indication of how Trump tariffs are affecting global trade. While the April data for Korea showed exports to the US …
9th May 2025
A cut more likely than a hold Malaysia is one of the few countries in the region not to have cut interest rates this cycle. Concerns about the inflation outlook and healthy economic growth have meant the central bank has been in no hurry to loosen. …
2nd May 2025
Slump in Korean construction not over GDP figures published this week show that Korea’s economy remains in deep trouble. GDP contracted by 0.2% in q/q terms in the first three months of the year and was 0.3% smaller than a year ago. The outturn was much …
25th April 2025
Electronics reprieve may prove short lived The US tariff exemptions announced last Friday on various electronics products, including on smartphones, semiconductors and TVs, represent a further let-off for Asia after the decision to pause the reciprocal …
17th April 2025
Crisis is not over, but winners could emerge Most of Asia outside China breathed a sigh of relief when Donald Trump announced a 90-day pause on his “reciprocal” tariffs. However, the crisis for the region is far from over. Exports from Asia to the US …
11th April 2025
Asian economies were hit with some of the highest “reciprocal” tariffs by the US. (See Chart 1.) Our initial response is here , and more of our coverage can be found on this page . Chart 1: “Reciprocal” Tariffs Sources : White House, Capital Economics …
4th April 2025
Autos in the firing line Donald Trump’s announcement that he will impose 25% tariffs on all automotive imports into the US from 3 rd April could be a big deal for parts of Asia. Korea and Japan are the most vulnerable. Exports of these products to the US …
28th March 2025
BoK’s dovish minutes This week’s publication of the minutes from the Bank of Korea’s February meeting , at which it cut rates for a third time in four meetings, show the Bank is becoming increasingly worried about the poor growth outlook. The concern was …
21st March 2025
Duterte arrest puts political instability in spotlight The arrest this week of former Philippine president Rodrigo Duterte by the International Criminal Court for his role in extra-judicial killings of over 6,000 suspected drug dealers has no direct …
14th March 2025
Taiwan vulnerable to semiconductor tariffs China, Mexico and Canada have so far been the focus of Trump’s tariff measures. But it seems likely other countries will soon enter the firing line. Given its large trade surplus with the US, Taiwan is an …
7th March 2025
Korea: jump in fertility unlikely to last Figures published earlier this week showed the fertility rate in Korea increased last year for the first time in nine years, rising from 0.72 in 2023 to 0.75 in 2024. (See Chart 1.) This uptick, though still below …
28th February 2025
Singapore’s budget focused on election Singapore’s budget on Wednesday included a number of measures designed to boost support for the government ahead of the general election that must be held by November. They included spending vouchers worth S$800 …
21st February 2025
India most vulnerable to reciprocal tariff President Trump looks to have abandoned the idea of imposing a flat universal tariff of 10%-20% on all imports to the US, and now appears to be favouring new reciprocal tariffs that will be imposed on a …
14th February 2025
Trade war begins: winners and losers in Asia Donald Trump’s 10% tariffs on China (along with those threatened for Mexico and Canada) could prove to be the start of a protracted trade war. (See here .) While there is a lot of uncertainty over what will …
7th February 2025
Pakistan: easing to be more gradual from here The State Bank of Pakistan (SBP) lowered its policy rate earlier this week by a further 100bps (to 12.0%), the sixth consecutive meeting at which rates were lowered. However, the accompanying statement makes …
31st January 2025
Homegrown problems a bigger risk to growth Our assumption is that Trump will impose a 10% tariff on all US imports (including on Korea), most likely sometime in the second quarter. On its own this would not have a huge impact on Korea, since a universal …
24th January 2025
Korea: political crisis weighing on growth The political crisis in Korea is continuing to drag on, with no clear sign of when or how it will come to an end. President Yoon Suk Yeol was arrested this week on charges of insurrection following his …
17th January 2025
Signs that political crisis is weighing on growth With inflation under control and signs the political crisis is weighing on the already-weak economy, we expect the Bank of Korea to cut interest rates by a further 25bps at its meeting on Thursday. …
10th January 2025
Dovish BoK minutes point to further rate cuts This week’s publication of the minutes from the Bank of Korea’s November meeting , at which it cut rates for a second month in a row, confirmed that inflation concerns have now largely subsided and that the …
20th December 2024
Deflation concerns to sway BoT After a relatively quiet week in terms of scheduled events and releases, the coming week sees central bank meetings in Pakistan, Thailand, Indonesia, Taiwan and the Philippines. We are expecting holds in Indonesia and …
13th December 2024
Prolonged crisis would weigh on the economy The easiest way out of the political crisis that Korea finds itself in would be for President Yoon Suk Yeol to resign. A resignation would trigger a presidential election within 60 days. Given the extent of …
6th December 2024
Activity data highlight need for further support We were one of the few analysts to correctly predict this week’s rate cut by the Bank of Korea , and we think it is only a matter of time before the Bank cuts again. The central bank’s statement and the …
29th November 2024
More policy support is needed When the Bank of Korea started its easing cycle in October , it pushed back strongly against the prospect of back-to-back rate cuts. Most analysts still expect rates to be left unchanged at 3.25% when the central bank meets …
22nd November 2024
New currency forecast and policy implications We have finalised our financial market forecasts following Donald Trump’s election victory. In short, we think US Treasury yields will remain elevated over the coming year (we previously anticipated falls) …
15th November 2024
Financial market and monetary policy impact Asian currencies fell against the dollar after the US election result was announced, and we think they will weaken over the coming months on the back of higher US Treasury yields and an increase in US tariffs. …
8th November 2024
Risks from North Korea on the rise North Korea’s relations with South Korea and its allies have taken a marked turn for the worse over the past month. This week’s test of an intercontinental ballistic missile has prompted South Korea and the US to conduct …
1st November 2024
Weak GDP data may give BoK second thoughts National accounts data published on Thursday showed that Korea only narrowly avoided a technical recession, with GDP expanding by just 0.1% q/q in Q3 after a 0.2% decline in Q2. The main drag came from exports, …
25th October 2024
Property prices flat last month One reason the Bank of Korea pushed back against the prospect of another near-term rate cut at its meeting last week was fear of a rebound in property prices that might threaten financial stability. We think this concern is …
18th October 2024
Bank of Korea cuts The Bank of Korea kickstarted its easing cycle earlier today with a 25bps cut. As we outlined here , with GDP growth struggling and price pressures very weak, further easing is likely over the coming months. BI unlikely to cut again …
11th October 2024
Korea – weak data point to first rate cut With inflation below target and activity data pointing to a further slowdown, we expect the Bank of Korea to kickstart its easing cycle at its scheduled monetary policy meeting next Friday. September’s inflation …
4th October 2024
Fiscal policy to hold back Pakistan’s recovery The IMF this week approved a new long-term US$7bn loan for Pakistan. The country will receive the first US$1bn immediately, with the remainder to be paid over the three years of the deal. Pakistan was close …
27th September 2024
Election risk to Sri Lanka’s recovery Sri Lanka has enjoyed a steady, if unspectacular recovery from the 2022 crisis which saw the country default on its debts and the president ejected from power in the face of huge popular protests. Data released late …
20th September 2024
What will the US election mean for the Asia growth outlook? Will China’s economy overtake the US? Will India fulfil its growth potential? We’re tackling these issues and more in our Asia roundtable in London on Tuesday, 24th September. If you’d like to …
13th September 2024
Indonesia budget eases fiscal concerns Indonesia’s budget for 2025 moved a step closer to being passed this week after a parliamentary committee and the government reached agreement on the main fiscal targets for next year. (The budget will now be put …
6th September 2024
Falling fertility bodes poorly for long-run outlook Data released this week showed that Korea's fertility rate (the average number of children a woman is expected to have over her lifetime) dropped further to 0.72 last year (see Chart 1), the lowest of …
30th August 2024
Currency concerns abating Three central banks announced policy decisions this week and all three kept rates on hold. At first glance then, an uneventful week. But there were dovish signs across the board that suggest all three will ease policy soon. We …
23rd August 2024
Further political uncertainty in Thailand Today’s election by Thailand’s parliament of Paetongtarn Shinawatra as prime minister is unlikely to draw a line under the country’s mounting political instability. Paetongtarn’s father Thaksin and aunt Yingluck …
16th August 2024
Our Asia team will be holding a Drop-In on Wednesday 14th August at 0830 ET/1330 BST to discuss the timing of Asian interest rate cuts and the impact of global markets volatility. Register here for the 20-minute online briefing. US growth …
9th August 2024
