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Despite a recent drop in inflation, the Malaysian central bank (BNM) kept its policy rate on hold at 3.25% today. While several central banks in the region have eased monetary policy this year, we expect interest rates in Malaysia will remain on hold …
5th March 2015
The February PMIs for Emerging Asia were generally encouraging, suggesting that the region's manufacturing conditions are slowly gaining a firmer footing. In the two economies where the PMIs most closely track the hard data, manufacturing output appears …
2nd March 2015
We see little prospect of an improvement in Indonesia’s current account over the next couple of years. This could leave the rupiah vulnerable when the Fed starts to tighten policy later this year, probably sometime in the summer. … Where next for …
27th February 2015
Equity markets in Emerging Asia recorded another month of solid gains in February. Currencies did not fare as well, particularly the Indonesian rupiah, which has continued to weaken against the US dollar. … Asian equity markets continue good …
A tight labour market in Taiwan is feeding through to stronger wage growth, which in turn is providing a boost to household consumption. The improving prospects for the consumer sector are a key reason to expect Taiwan to perform strongly this year. … …
26th February 2015
Emerging Asia has seen a sharp drop in inflationary pressures over the past few months. Taiwan, Singapore and Thailand are now experiencing deflation, while inflation is 1% y/y or below in Malaysia, Korea, and Vietnam. Only in Indonesia is inflation …
25th February 2015
Consumer price inflation in Vietnam slowed again in February, and looks set to remain very low for the coming year. With the economy still overwhelmingly dependent on exports for growth, another rate cut is likely soon. … Vietnam CPI …
24th February 2015
The latest GDP figures for Emerging Asia show regional growth was broadly flat again last quarter. Looking ahead, a strong pick-up looks unlikely. But with monetary policy set to remain loose and oil prices likely to stay low, we expect most countries to …
18th February 2015
With inflation set to stay elevated until the end of the year and the current account deficit likely to remain a source of vulnerability, today’s rate cut by Bank Indonesia is unlikely to signal the start of an aggressive series of rate cuts. … Aggressive …
17th February 2015
The Bank of Korea (BoK) today left its policy rate on hold at 2.0% after the government softened its pressure for further loosening. Looking ahead, we think persistent concerns about high household debt levels, coupled with a pick up in growth in the …
Singapore's economy picked up in the fourth quarter, despite a contraction in the manufacturing sector. Lower oil prices will help Singapore's economy in 2015, but slowing credit growth will keep growth shackled. … Singapore GDP (Q4 …
Thailand's economy continued to gain momentum in the fourth quarter, with growth picking up to 2.3% y/y from 0.6% the quarter before. The Thai economy should gain a firmer footing in the coming quarters, but growth is still likely to disappoint by past …
16th February 2015
Korea’s housing market is showing signs of recovery, supported by the fall in stocks of unsold homes, rising rents, low interest rates and supportive government policies. A stronger housing market should provide a boost to growth over the next couple of …
13th February 2015
Despite the recent drop in inflation, the central bank in the Philippines is unlikely to join a number of other central banks in the region that have loosened monetary policy since the start of the year. … Philippines unlikely to join Asian rate cutting …
12th February 2015
Malaysia's growth picked up to 5.8% y/y in the fourth quarter, compared with 5.6% the quarter before. However, this acceleration will likely prove short-lived as lower oil prices will be a major headwind for the economy this year. … Malaysia GDP …
There has been a clear shift towards looser monetary policy around the world since late 2014, and several Asian central banks have been part of the trend. Any further moves over the coming months are likely to be in the direction of looser policy, but …
6th February 2015
Indonesia today reported another quarter of weak GDP growth. The figures underline that the country’s new president, Joko Widodo, faces a tough challenge to reinvigorate the economy, despite a promising first 100 days in office. … Indonesia GDP …
5th February 2015
The Reserve Bank of Australia (RBA) cut its cash rate for the first time since mid-2013 today, taking it down by 25 basis points to 2.25%. Given the RBA’s change of stance and the likelihood that the economy will slow this year, more loosening is likely …
3rd February 2015
The January PMIs for Emerging Asia showed some signs of improvement, suggesting that the region's manufacturing sectors started 2015 on a slightly better note. In the two economies where the PMIs most closely track the hard data, manufacturing output …
2nd February 2015
Emerging Asian equity markets have got off to a strong start to the year, while the performance of Asian currencies has been much more mixed. … Asian equity markets make winning start to …
30th January 2015
Korea stands to be one of Emerging Asia’s biggest beneficiaries from lower oil prices, and will also be boosted by a recovery in the housing market and by expansionary fiscal policy. We think most forecasters are now being too pessimistic about the …
The labour market continues to tighten, as the economic recovery is picking up speed. However, the continued slowdown in inflation suggests that the Bank of Japan still has more work to do. … Taiwan GDP …
Expectations that the fall in oil prices will trigger a wave of interest rate cuts across Asia are probably wide of the mark. Admittedly, Pakistan, India and Singapore have each loosened monetary policy this month. In each case though, loosening had …
29th January 2015
The Philippines economy picked up strongly last quarter, largely owing to a rebound in government spending. We expect growth to remain strong in 2015, supported by recent improvements to the business environment, low interest rates and a healthy export …
The Reserve Bank of New Zealand (RBNZ) kept its policy rate at 3.5% today and suggested there is now far less certainty its next move will be a hike. We are not expecting any changes in 2015 or 2016. … New Zealand's central bank takes a more neutral …
The Malaysian central bank (BNM) unsurprisingly kept its policy rate on hold at 3.25% today, and is unlikely to make any changes during the rest of this year. There are some concerns about the pace of economic growth, but inflation has not dropped …
28th January 2015
The Bank of Thailand (BoT) left interest rates unchanged at 2.0% today despite the recent drop in inflation. While dissent within the monetary policy committee has raised the odds of a rate cut, we think the central bank will want to monitor the impact on …
Indonesia’s new president, Joko Widodo (known as Jokowi) has made an encouraging start to hispresidency. But tougher challenges lie ahead, while a corruption scandal is raising questions about hisability to assert his authority and threatening to tarnish …
In an unscheduled decision, the Monetary Authority of Singapore (MAS) today loosened monetary policy by reducing the slope of its target band for the nominal effective exchange rate (NEER). The change was made in response to the recent drop in inflation. …
The State Bank of Pakistan (SBP) cut its policy rate by 100bp to 8.5%, the lowest since 2005, over the weekend. Although inflation and money supply growth have both slowed sharply in recent months, we doubt the central bank will see scope to cut further. …
26th January 2015
The decision by the Swiss National Bank (SNB) to abandon its exchange rate ceiling has created questions about the sustainability of other currency regimes. We think there is little chance of the Monetary Authority of Singapore (MAS) overhauling its …
23rd January 2015
Today's advance estimate suggests Korea's economy ended 2014 on a soft note, with growth slowing to a seasonally-adjusted 0.4% q/q in Q4 from 0.9% the quarter before. However, growth should rebound in the coming quarters, supported by expansionary fiscal …
The recent drop in oil prices is not the only reason to think that consumer price inflation will remain low in New Zealand over the next couple of years. Domestic price pressures are also fading. We now expect the Reserve Bank of New Zealand (RBNZ) to …
21st January 2015
Most economies in Emerging Asia will benefit from falling oil prices. The big exception is Malaysia, where the government today revised its 2015 forecasts for the budget deficit, GDP growth and the current account surplus. While a collapse in the oil …
20th January 2015
Sharp falls in oil prices in recent months will put downward pressure on inflation across Emerging Asia, with a number of countries likely to see inflation turn negative in early 2015. On the whole, this is a welcome development. Falling oil prices will …
16th January 2015
The Bank of Korea (BoK) today left its policy rate on hold at 2.0%, and lowered its 2015 GDP growth and inflation forecasts. Although the forecast downgrades may fuel speculation about rate cuts, we think the economy is set to rebound in the coming …
15th January 2015
The recent sharp drop in global oil prices is a positive development for Emerging Asia. It will support growth in most economies and will put downward pressure on inflation, providing scope for monetary policy to be kept looser than would otherwise have …
14th January 2015
Problems in the euro-zone have been dragged back into the spotlight by the inconclusive recent presidential election in Greece. In general, Emerging Asia is well-placed to cope if the euro-zone does again fall back into crisis. That said , some of the …
9th January 2015
Opposition candidate Maithripala Sirisena has emerged victorious in Sri Lanka’s presidential election. Markets have responded favourably, perhaps not so much to the result itself as to encouraging signs that there will be a smooth transfer of power. …
The introduction of a Goods and Services Tax (GST) in April marks an important step towards strengthening Malaysia's public finances over the medium term. And while it will put upward pressure on inflation and reduce consumers' purchasing power, it is …
7th January 2015
The December PMIs for Emerging Asia were generally disappointing, suggesting that the region's manufacturing sectors continue to struggle. In the two economies where the PMIs most closely track the hard data, manufacturing output appears lacklustre, …
5th January 2015
Sri Lanka’s presidential election, scheduled for 8 th January, is shaping up to be much closer than expected, with the current president, Mahinda Rajapaksa, now facing a genuine challenge from Maithripala Sirisena, a defector from his own party. An …
24th December 2014
In this Weekly we outline our key calls for the region in 2015. We expect Emerging Asia to be a bright spot in the global economy, with growth set to accelerate in most economies. Falling commodity prices should put downward pressure on inflation, which …
19th December 2014
Emerging Asia’s financial markets have not escaped the latest turmoil unscathed, but they have fared better than other EM regions. … Rough end to the year for Asian …
18th December 2014
New Zealand's economy accelerated in Q3, despite monetary tightening earlier in the year. However, we are still expecting a slowdown in 2015 and see little chance of the Reserve Bank of New Zealand (RBNZ) hiking rates again in the next six months. … New …
Thailand's tourism sector, which was a key growth driver before the most recent political crisis, finally looks to be on the mend, and should add much-needed support to the economy going into 2015. That said, the pace of its recovery will be hampered by …
The Bank of Thailand (BoT) left interest rates unchanged at 2.0% today against the backdrop of gradual improvement in the economy. With price pressures benign, we think the BoT will look to keep monetary policy loose to support economic growth. … Thai …
17th December 2014
In our final Weekly of the year we will be outlining our key forecasts for 2015. But this week we take a look back at how we did in 2014. Our downbeat forecasts for growth largely played out, as did our view that inflation would stay low. But our record …
15th December 2014
Sri Lanka recorded another quarter of strong growth in Q3, with the economy expanding by 7.7% y/y, down only slightly from Q2. Looking ahead, a pick-up in private sector credit growth and robust external demand should help Sri Lanka maintain its position …
Rising levels of household debt suggest further rate cuts by the Bank of Korea, which today left interest rates on hold at 2.0%, are unlikely. In fact, with GDP growth set to accelerate in the coming months, we think the next move in rates is more likely …
11th December 2014
