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Malaysia’s central bank (BNM) kept its policy rate on hold at 3.25% today following a hike at its last meeting in January. With inflation slowing, growth likely to cool further and the currency strong, we doubt that BNM will tighten again this year. … …
7th March 2018
Despite inflation rising to its highest rate in nearly four years in February, the central bank seems in little hurry to tighten monetary policy. We continue to believe that interest rates in the Philippines will remain on hold at least until the end of …
6th March 2018
The imposition of US tariffs on steel and aluminium would have little direct impact on Asian economies. The bigger risk is that they represent the latest steps towards a damaging trade war. … Direct impact of US steel tariffs is …
2nd March 2018
GDP growth across Emerging Asia edged down in the final quarter of last year and is likely to ease further over the coming year. While in most cases the slowdown should be relatively gradual, Hong Kong (where higher interest rates could trigger a sharp …
The February PMIs for Emerging Asia suggest the region’s manufacturing sectors remained in decent health. While the surveys point to rising prices, the big picture is that inflation in most of these economies is unlikely to become a major concern, …
1st March 2018
Asian equities have recovered much of their losses over the second half of this month but a sustained rebound is unlikely. We expect most stock markets to only edge higher over the rest of the year. … Are the good times over for Asian …
28th February 2018
The Bank of Korea (BoK) today unsurprisingly kept its policy rate on hold at 1.50% for its second straight meeting, and the accompanying statement and governor’s press conference suggest the central bank will proceed cautiously with policy tightening. We …
27th February 2018
A low level of foreign currency debt in the Philippines means the recent weakness of the peso is not a major concern. In fact, despite the current worries about rising inflation, policymakers appear to be welcoming the boost to competitiveness the weak …
23rd February 2018
With most countries in the region now having reported GDP figures for Q4, we estimate that aggregate growth in Emerging Asia (excluding China and India) came in at 4.4% y/y last quarter. While this was slower than the 4.7% recorded in the third quarter, …
22nd February 2018
Thailand’s economy lost some momentum in Q4 but still expanded at the fastest pace since 2012 last year. We expect growth to remain robust over the coming quarters, supported by accommodative fiscal and monetary policies. … Thailand GDP …
19th February 2018
Sri Lanka’s central bank (CBSL) left rates on hold today but, in contrast to the consensus, we think that rate cuts will come onto the agenda soon. … Sri Lanka: rates cuts not far …
15th February 2018
Singapore’s government looks likely to raise taxes in its Budget next week to help fund the costs of its rapidly ageing population. But the country’s strong fiscal position leaves it much better positioned to deal with rising healthcare and social …
14th February 2018
The Bank of Thailand’s (BoT) decision to leave interest rates unchanged at 1.50% today was no surprise given the backdrop of an improving economy but very weak price pressures. There was nothing in the accompanying statement that suggests the BoT is …
Malaysia’s economy slowed in Q4 after expanding at its fastest pace in more than three years in Q3. We expect the economy to lose a little more steam over the coming quarters against a backdrop of moderating export growth and tighter monetary conditions. …
The revised estimate of Singapore’s Q4 GDP confirmed that the economy cooled at the end of 2017. Less supportive monetary conditions and fiscal policy suggest growth is likely to slow further over the coming quarters. … Singapore GDP (Q4 …
The manufacturing industry in the Philippines has been a key driver of economic growth in recent years. Although the sector should continue to grow strongly in the near term, the medium-term outlook is becoming more challenging. … Philippines: Will …
9th February 2018
Despite January’s jump in inflation, the Philippines central bank (BSP) left rates on hold at its first meeting of the year. While most analysts think that BSP will be forced to tighten policy this year, we continue to think that it will leave rates on …
8th February 2018
Indonesia’s growth picked up slightly in the fourth quarter to 5.2%, from 5.1%, but we doubt the recovery has further to run. While the consensus is expecting growth to accelerate gradually over the next couple of years, we think the economy will grow at …
5th February 2018
Credit growth has continued to slow in some of the countries, namely Thailand and Malaysia, we had previously identified as being at risk from a rapid build-up of private sector debt. However, risks are continuing to build in other parts of the region, …
2nd February 2018
Emerging Asia’s PMIs for January suggest the region’s manufacturing sectors gained momentum at the start of 2018. Encouragingly, the headline readings for Taiwan and Korea – the two economies where the PMIs most closely track the hard data – both …
1st February 2018
Asian equities and currencies have had a strong start to 2018, but we doubt that their recent performance will be sustained. … Equities and currencies make strong start to …
31st January 2018
Taiwan’s GDP growth rose in Q4 to the fastest in nearly three years. We think the economy will cool over the quarters ahead. On the plus side, domestic demand is likely to hold up well supported by loose fiscal policy. But export growth – a key prop to …
Malaysia and Pakistan have both hiked interest rates over the past week, and while the consensus and financial markets are expecting most other central banks in the region to tighten policy in 2018, we think rates in the majority of countries will either …
30th January 2018
The recent jump in oil prices does not alter the outlook for Asia’s economies. But if prices were to rise significantly further, we would be most concerned about the impact on India and Sri Lanka. … What do high oil prices mean for …
29th January 2018
The Thai authorities are becoming increasingly concerned by the strength of the baht, which has been one of the best performing emerging market currencies over the past year. The most likely policy response is further currency intervention as well as some …
26th January 2018
Malaysia’s central bank (BNM) raised its key policy rate by 25bps to 3.25% today, but with growth set to slow, inflation benign and the currency continuing to strengthen, we suspect this will be a case of one and done. … Malaysia: more rate hikes …
25th January 2018
While Korea’s economy cooled at the end of 2017, we expect growth to regain some momentum in the coming quarters, supported by a turnaround in the tourism sector. … Korea GDP …
The agreement to press ahead with the revised Trans-Pacific Partnership is important in a number of ways. Not only should it provide a decent boost to growth prospects across parts of Asia, but it also shows that despite the shift towards protectionism in …
24th January 2018
US tariffs on imports of solar cells and washing machines are likely to cause some short-term disruption in parts of the region, most notably Malaysia, Korea and Vietnam. However, the overall impact on the region’s growth prospects will be very small. … …
23rd January 2018
The Philippines’ economy cooled off a bit in Q4, with growth easing to 6.6% y/y. We expect the economy will slow further this year, weighed upon by moderating export growth and sluggish investment. … Philippines GDP …
Rapid economic growth, surging imports and strong credit growth have fuelled fears that the Philippines is overheating and that the central bank will soon be forced to hike interest rates to bring the economy under control. We think such fears are …
22nd January 2018
The 2018 Winter Olympics, which get under way in South Korea next month, will not provide much of a boost to the country’s economy. But this will not stop South Korea from recording another year of strong growth. … Korea set for strong 2018, but not …
19th January 2018
Today’s decision by Bank Indonesia (BI) to leave interest rates unchanged at 4.25% came as no surprise. Although the central bank’s accompanying statement suggests that further easing is not imminent, with growth likely to struggle and inflationary …
18th January 2018
The Bank of Korea (BoK) kept its policy rate on hold at 1.50% today, and the governor’s accompanying press conference signalled aggressive tightening is not in the pipeline. With the economy set to grow at a robust pace, but inflation benign and concerns …
Growth in Emerging Asia reached a five-year high in 2017 but we think that it has now peaked and will slow gradually over the next couple of years. The main headwind will come from the export sector. Despite the decent outlook for the global economy, the …
16th January 2018
Despite the decent outlook for global growth over the next year, we doubt the recent rebound in Asian export volumes will be sustained. If we are right, then regional growth is likely to slow, with Asia’s most trade-dependent economies, notably Hong Kong …
12th January 2018
The South Korean government hopes that steep hikes to the minimum wage will provide a boost to private consumption and help to reduce inequality, but there is a risk that the policy may do more harm than good. … Will minimum wage hikes hurt Korea’s …
11th January 2018
Exports from Vietnam should continue to grow strongly in the short term, helped by booming foreign direct investment into the manufacturing sector. However, the lack of spillovers from the dynamic foreign sector to the less-productive domestic economy is …
9th January 2018
In this first Weekly of 2018, we take our usual look at the important elections that are set to take place in Asia over the coming year, assessing the implications for policymaking and economic growth. Most of the attention is likely to be focused on …
5th January 2018
The December PMIs for Emerging Asia suggest that the region’s manufacturing sectors remained in good health. Focusing on the two economies where the PMIs most closely track the hard data, Taiwan’s manufacturing sector strengthened further, while Korea’s …
2nd January 2018
Singapore’s economy had a good year in 2017, with annual growth hitting a three-year high. While the decent prospects for global demand suggest Singapore’s economy will do reasonably well in 2018, there are a number of headwinds that will constrain the …
Economic growth across most of Emerging Asia has rebounded strongly over the past year on the back of a surge in exports. But will this strong growth continue next year? In our final Weekly of the year, we outline what 2018 has in store for the region. … …
21st December 2017
Asian assets, especially equities, have had a strong year in 2017. However, a repeat performance in 2018 looks unlikely. … A stellar 2017, repeat in 2018 …
With growth robust and inflationary pressures subdued, the Bank of Thailand (BoT) unsurprisingly kept its policy rate on hold today at 1.50%. The accompanying monetary policy statement reaffirms our view that the policy rate will remain unchanged for some …
20th December 2017
President Duterte of the Philippines is on Tuesday set to sign into law a major package of tax reforms which would mark his most important legislative achievement since coming to office 17 months ago. The changes include reductions in income tax alongside …
18th December 2017
Data released late last week showed that Sri Lanka’s struggling economy weakened in Q3. With both monetary and fiscal policy set to remain tight, we don’t see a meaningful recovery anytime soon. … Sri Lanka GDP …
The fall in the Pakistani rupee over the past week has once again put the spotlight on the country’s precarious balance of payments position. Pakistan will soon be forced to either let the currency weaken much further, tighten monetary policy …
15th December 2017
The Philippines central bank (BSP) left rates unchanged at 3.0% today while also downplaying fears that the economy is overheating. While both financial markets and the consensus are expecting monetary policy to be tightened next year, we continue to …
14th December 2017
Many countries in South and South East Asia invest too little on infrastructure. Fiscal constraints mean the situation is unlikely to change anytime soon, with the result that poor infrastructure is likely to drag on the region’s prospects for some time …
8th December 2017
The programme of tax hikes and spending increases passed today by South Korea’s parliament is unlikely to have much impact on the country’s growth prospects. The budget is forecast to be fiscally neutral, so will not provide much of a boost to short-term …
6th December 2017
