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Singapore’s economy grew faster than previously estimated in Q1, helped by a surge in construction activity. A pick-up in global growth after a weak start to the year should support Singapore’s exports over the coming quarters, but rising interest rates …
26th May 2015
The aggressive series of rate cuts by the State Bank of Pakistan (SBP) over the last six months suggests that it may, once again, have become too complacent over the medium-term inflation outlook. … Is Pakistan repeating the same old …
25th May 2015
The sharp rise in household credit growth in recent months has exacerbated fears about Korea’s already-high household debt level. While financial stability risks should remain contained in the near term, household debt growth will eventually need to slow …
A surge in spending by Chinese tourists across Emerging Asia is helping to compensate for a fall in the region’s goods exports to China. Spending by Chinese tourists should continue to grow at a rapid pace in the coming years, with Hong Kong, Cambodia and …
22nd May 2015
Inflation in Malaysia looks set to remain low despite the introduction of a 6% Goods and Service Tax (GST), which came into force at the start of April. Although subdued inflation will give the central bank (BNM) room to keep monetary policy loose, we …
One year on from the military coup in Thailand, political order has been restored and the economy has returned to growth. But with the country no closer to a lasting solution to its long-running political crisis, uncertainty will continue to weigh on the …
21st May 2015
One of the reasons for our positive view on the Philippines is the important role that remittances play in the economy. Not only do remittances provide a useful support to economic growth but, by keeping the current account in surplus, they also make the …
Bank Indonesia (BI) today left its main policy rate on hold at 7.50%, but relaxed macro prudential policy in a bid to support the weak economy. We expect interest rates to be eased later in the year as inflation falls back towards the central bank’s …
19th May 2015
The pick-up in Thailand's growth in Q1 was exaggerated by a low base in the first quarter of 2014, when growth contracted and political unrest was at its peak. With the economy facing headwinds such as slow budget disbursement, high household debt, …
18th May 2015
Emerging Asia’s rate cutting cycle appears to be nearing its end, with only a handful of central banks likely to cut a little further. But it won’t be until 2016 that the region’s central banks move into tightening mode. … Asia’s rate cutting cycle is …
15th May 2015
The slowdown in Malaysia’s economy in Q1 would have been sharper were it not for consumers bringing forward spending ahead of the implementation of a Goods & Services Tax (GST) in April. Growth is likely to be much weaker in Q2, once this support becomes …
The Bank of Korea (BoK) today left its policy rate unchanged at a record low of 1.75% amid concerns about the rapid increase in Korea's household debt. We think the BoK’s rate-cutting cycle has now come to an end. … Korea's rate-cutting cycle is …
The central bank in the Philippines (BSP) left interest rates on hold today. With the economy set to continue growing at a decent pace, the Philippines is unlikely to join in the region’s interest rate-cutting cycle. We expect policy rates to be left on …
14th May 2015
Emerging Asia’s export performance took a sharp turn for the worse in the first quarter, with a slump in demand from China creating the largest drag. However, a positive turnaround is likely over the coming months. … Asia’s exports should recover from …
8th May 2015
The Malaysian central bank (BNM) kept its policy rate on hold at 3.25% today. The key uncertainty in the months ahead is how spending reacts to April’s tax hike. As things stand though, we expect rates to be left unchanged until next year. … Malaysia’s …
7th May 2015
Today’s 1% devaluation of the dong by the State Bank of Vietnam (SBV) is unlikely to provide much of a boost to exports, as some have suggested. Looking ahead, we are only expecting minor adjustments to the exchange rate over the next couple of years. …
Indonesia’s economy slowed again in the first quarter, underlining the challenge faced by the country’s new president and adding to the case for further rate cuts. Although we doubt growth will slow much further in the coming quarters, we are not likely …
5th May 2015
The PMIs for Emerging Asia in April were generally disappointing. In the two economies where the PMIs most closely track the hard data, manufacturing output now appears to be contracting. … Manufacturing PMIs …
4th May 2015
Most currencies in Emerging Asia recovered some ground against the US dollar in April as investors pushed back their expectations for rate hikes in the US. Equity markets also started the month strongly, but the weaker tone of incoming data seems to have …
30th April 2015
Given that Malaysia is Emerging Asia’s largest net energy exporter it is no surprise that the ringgit has been the region’s worst performing currency over the last nine months. Now that oil prices have stabilised it is tempting to conclude that the worst …
Growth in Taiwan held up well in the first quarter, despite the recent slowdown in global growth. What's more, the economy looks set for a pick-up during the rest of the year, particularly since the benefits of lower energy prices are still to fully feed …
Emerging Asia has made a weak start to the year. The headlines have been grabbed by China's slowdown but, a few positive signs from India aside, there has been little cause for cheer around the rest of the region. Leaving out China and India, Emerging …
29th April 2015
Against a backdrop of weak growth, negative inflation and government pressure for further easing, the Bank of Thailand (BoT) cut its policy rate by 25 basis points for the second straight meeting today, bringing it to 1.50%, which is the lowest since July …
Rapid wage growth, rising land costs and the appreciation of the renminbi have all helped to make China a less attractive place for low-end manufacturers to operate. Recent trends in foreign direct investment suggest that Asia's least-developed economies …
24th April 2015
The healthy pick-up in Korean growth in the first quarter should lift some of the gloom that has settled over the economy in recent months. What's more, we think growth will strengthen further in the coming quarters, supported by low energy prices, …
23rd April 2015
The recent run of weak data has increased pessimism about the Korean economy, as reflected by a string of downgrades to its 2015 growth forecasts. But while the consensus now expects growth to soften from 2014, we still think the economy will pick up. … …
21st April 2015
The Philippines is entering a demographic sweet spot that could provide a big boost to economic growth, but only if enough new jobs can be found for the wave of young people that will enter the workforce over the coming decade. … …
17th April 2015
Against a backdrop of falling inflation, the central bank of Sri Lanka (CBSL) today cut its deposit and lending policy rates by 50 basis points each, to 6.0% and 7.5%, respectively. … Sri Lanka cuts rates to new lows, door opened for …
15th April 2015
Bank Indonesia (BI) left its main policy rate on hold today at 7.5% despite the continued weakness of the economy. Although much will depend on what happens to the rupiah, we expect to see interest rates reduced further before the end of the year. … …
14th April 2015
The Monetary Authority of Singapore (MAS) today decided to make no changes to its policy stance, despite the current bout of deflation and downbeat GDP growth in the first quarter. Concerns about the medium term inflation outlook mean that the MAS is …
We expect the Monetary Authority of Singapore (MAS) to loosen policy again at its meeting on Tuesday, most likely by re-centring its target band for the exchange rate to allow some depreciation. But while a weaker Singapore dollar would support exports, …
10th April 2015
Most economies in Emerging Asia are likely to record decent growth over the next couple of years. However, with the pace of expansion in the region’s biggest economy, China, set to ease further in 2015-16, regional growth is likely to remain broadly flat …
9th April 2015
The Bank of Korea (BoK) held its policy rate at 1.75% today, following a rate cut last month. The slow pace of recovery has raised speculation of further monetary policy loosening, but we think concerns about Korea's high and rising household debt level …
Poor infrastructure is likely to remain a key constraint on economic development across large parts of Emerging Asia over the next decade. For all the headlines, the Asian Infrastructure Investment Bank (AIIB) is only likely to provide a small part of the …
3rd April 2015
The PMIs for Emerging Asia fell back in March, underlining the fragility of the region's manufacturing recovery. Indeed, in the two economies where the PMIs most closely track the hard data, manufacturing output now appears to be stagnant. … …
2nd April 2015
Most equity markets and currencies in Emerging Asia fell last month, although in the majority of cases the declines were relatively small. … Currencies and equity markets drop …
1st April 2015
Policymakers in Indonesia should welcome, rather than fear, a weaker rupiah. Not only is foreign currency debt relatively low, but there is little sign that a fall in the currency is pushing up inflation. What’s more, a weaker currency should provide a …
31st March 2015
Although credit growth in Thailand has cooled over the past few years, the process of deflating the country’s credit bubble is still far from over. Given this, the Bank of Thailand’s decision earlier this month to cut interest rates suggests it may not be …
27th March 2015
Vietnam’s economy grew strongly in the first quarter of the year, thanks mainly to robust growth in the manufacturing sector. We are raising our growth forecast for this year to reflect the improving prospects for the economy. … Vietnam GDP …
26th March 2015
Currency strength in Emerging Asia has been a factor in the region's recent wave of policy loosening. It appears to be undermining export competitiveness and has helped push inflation down further. Concerns about export competitiveness, at least, will …
25th March 2015
Emerging Asia’s exports have taken a turn for the worse in recent months. Leaving out China, the region’s merchandise exports, measured in US dollar terms, contracted at the sharpest annual rate in two years in January. So far six economies have released …
24th March 2015
Despite slowing growth, a bout of deflation and a housing market that has recently taken a turn for the worse, Taiwan is unlikely to join the Asian rate-cutting cycle at its upcoming meeting. … Taiwan is unlikely to join Asia's rate-cutting …
23rd March 2015
The first rate hike in the US looks to be only a matter of months away. But local factors, not the actions of the US Federal Reserve, will determine the next moves by Asia's central banks. … Asia does not need to follow the Fed's …
19th March 2015
Having surprised markets last month with a rate cut, Bank Indonesia (BI) left its key policy rate on hold today at 7.50%. Although we expect to see further rate cuts this year, the pace of easing is likely to be gradual. … Indonesia leaves rates on hold, …
17th March 2015
The weakness of the Indonesian rupiah is unlikely to kick-start a recovery in the country’s non-commodity export sector. For one thing, it has not left Indonesian exporters looking any more competitive. Meanwhile, a dilapidated infrastructure and onerous …
13th March 2015
We have been warning for some time that parts of Asia are experiencing an unsustainable credit binge, and that credit growth will need to slow for a crisis to be avoided. Encouragingly, credit growth has been slowing recently in China, Hong Kong, …
12th March 2015
The Bank of Korea (BoK) reduced its policy rate by 25 basis points to 1.75% today, adding to a growing list of central banks that have cut rates this year. But Korea's high household debt levels, coupled with the recent acceleration in household credit …
The Bank of Thailand (BoT) joined the global shift toward monetary loosening today, cutting its policy rate by 25bp to 1.75%. Looking ahead, we think the BoT will keep rates on hold in the coming months as it monitors the impact on the economy of the …
11th March 2015
Taiwan’s Financial Supervisory Commission caused a stir recently when it warned of the rising risk of a property price crash. Although the economy is unlikely to escape unscathed if property prices did collapse, we doubt the broader impact would be too …
6th March 2015
Consumer price inflation in the Philippines picked up slightly in February, but remains comfortably towards the lower end of the central bank’s (BSP) target range. Although we expect inflation to rise over the coming year, the increase will be gradual, …
5th March 2015
