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The August PMIs for Emerging Asia show that, outside of China, the region’s manufacturers are continuing to struggle, with the headline numbers now below 50 across the region. … August PMIs show Asian manufacturing sectors still …
2nd September 2013
Today’s GDP figures underline that India’s economy was already fragile before the recent rout of the rupee. Given the ongoing turmoil, economic conditions look likely to get worse before they get any better. … Is India’s economy heading the way of its …
Asia has borne the brunt of the EM currency sell-off this month with the Indian rupee and Indonesian rupiah the worst performers in the emerging world. The currencies of Thailand and the Philippines have struggled too. But some Asian currencies have …
29th August 2013
The extent of the latest rout in emerging market currencies has prompted comparisons with previous crises, such as that in the autumn of 2008. But we suspect some recovery may be around the corner. After all, another financial collapse is unlikely and …
GDP growth in the Philippines remained strong in Q2, helped by buoyant domestic demand. The economy is well-placed to withstand recent turmoil in financial markets. Indeed, we still expect the Philippines to be one of Asia’s top performers over the next …
Financial markets in Asia have continued to suffer this week but we continue to believe that the region will weather the storm. Vulnerabilities are highest in India. Elsewhere though, even a large pull back of foreign capital should be manageable. … How …
Recent headlines have been dominated by a sharp shift in sentiment against EM assets. Asian economies have been hit harder than most in the sell-off. However, away from the financial markets, there are signs of improvement across much of Asia. Looking …
26th August 2013
The rupee continued to slide today, breaking through 65 to the US dollar for the first time. Newspaper headlines continue to talk of a crisis. In this Update we compare the current situation with previous crises in Asia to illustrate why, although India’s …
22nd August 2013
Asian currencies and equity markets have been hit hard by the recent sell-off inemerging market assets with India and Indonesia the worst affected in the region.Bond yields have risen, but remain low by historical standards. … Emerging Asia Markets …
21st August 2013
The Bank of Thailand kept its policy rate at 2.50% today. We continue to expect the central bank to keep rates low for the rest of 2013 before gradually tightening in 2014 as growth prospects improve. … Malaysia’s 2013 growth to …
The Bank of Thailand kept its policy rate at 2.50% today. We continue to expect the central bank to keep rates low for the rest of 2013 before gradually tightening in 2014 as growth prospects improve. … Thai rates to stay unchanged in …
The slide of the rupee has triggered speculation that India is heading toward a balance of payments crisis. We do not think a crisis is on the cards, but the outlook is downbeat and fraught with risks. … Is India heading toward …
20th August 2013
Thailand’s Q2 GDP data showed continued weakness in the economy, and we do not expect much of a rebound in the second half of the year. Given the central bank’s limited scope to aggressively loosen policy, the government will feel the pressure to support …
19th August 2013
Asia’s manufacturers have had a hard time since the global financial crisis, and are currentlystruggling through yet another weak patch. However, they have actually done much betterthan their peers in other emerging regions, and are also better placed to …
Bank Indonesia’s decision to leave interest rates on hold today does not mean the end of the tightening cycle. However, with the recent spike in inflation likely to prove temporary and the economy continuing to weaken, any future tightening is likely to …
15th August 2013
Thailand's private sector credit as a share of GDP has increased significantly in recent years, raising concerns about financial stability. Even if a crisis is avoided, current credit growth rates are unsustainable and will have to slow, which will act as …
India’s latest data releases underline the challenges faced by the country and its new central bank governor. Today’s inflation data show that wholesale price inflation accelerated and consumer price inflation remains high. Meanwhile, industrial …
14th August 2013
Last week India appointed Raghuram Rajan, a former chief economist at the IMF, as the new governor of the Reserve Bank (RBI). The new governor takes over at a tricky time, with India’s economy struggling with a range of problems. This Weekly looks at the …
12th August 2013
The Bank of Korea’s (BoK) decision to keep interest rates on hold today was no great surprise given continued low inflation and recent signs of a pick-up in GDP growth. We expect to see rates on hold not just for the rest of this year, but for the whole …
8th August 2013
The Reserve Bank of Australia (RBA) cut its cash rate by 25bp to 2.5% at its meeting today. It is likely to keep rates very low over the next two years to support the economy through a mining slowdown. … Australia to keep policy loose as mining boom …
6th August 2013
For all the hype about the rise of the Asian consumer, the recent performance of consumer spending in Asia has been disappointing. The weakness is largely explained by subdued spending in the region’s richer economies dragging down the overall figures. …
5th August 2013
Data released today showed that the pace of economic growth in Indonesia eased slightly in Q2. Higher inflation and tighter monetary policy will weigh on the economy over the next year, and we are revising down our 2014 forecast to reflect the more …
2nd August 2013
The July PMIs for Emerging Asia point to weakening conditions in the region’s manufacturing sectors. Both output and new orders were especially disappointing. We maintain our view that fragile global demand will cause Asia’s manufacturers to struggle at …
1st August 2013
GDP data released today showed that Taiwan’s economy remained lacklustre in the second quarter. Growth is likely to remain weak in the near-term but, with the global economy set to record a slow, but steady recovery over the next couple of years, Taiwan’s …
31st July 2013
The Reserve Bank of India (RBI) kept its policy rates unchanged at its meeting today, as was widely expected. Recently-implemented tightening measures could be removed within the next few months, if the rupee remains stable, but policy rates are likely to …
30th July 2013
Government plans in Thailand for a series of huge infrastructure projects have the potential to transform the country’s growth prospects. However, as this Weekly explains, success is by no means guaranteed. … Infrastructure projects key for Thailand’s …
29th July 2013
The decision by the Philippine central bank (BSP) to leave interest rates on hold today was no great surprise given that growth remains strong and inflation looks set to stay subdued. We expect interest rates to remain on hold for the rest of the year, …
25th July 2013
Data released today show that Korea’s economy picked up in Q2 on the back of stronger consumption and investment. Although low inflation means policymakers still have scope to cut interest rates, with the recovery showing signs of gaining momentum, we …
Despite worries that the housing market may be showing signs of overheating, the Reserve Bank of New Zealand (RBNZ) kept its policy rate unchanged at 2.5% today. We expect the cash rate to remain on hold until the end of the year and to be kept low in …
24th July 2013
Growth in Emerging Asia, which has slowed sharply since the start of the year, may have bottomed out. According to our GDP Tracker, which uses monthly data for output and expenditure, regional GDP growth picked up slightly in May. That said, growth …
Exports from Emerging Asia remain lacklustre and continue to hold back the region’s growth. As this Weekly explains, a strong and sustained export recovery is unlikely anytime soon. … Asia’s export weakness to …
22nd July 2013
China’s Q2 GDP data underline the extent to which Asia’s economic landscape has shifted. We expect growth in China to continue to slow over the next couple of years. For India, the worst of the downturn may already have passed and policymakers’ …
17th July 2013
The Reserve Bank of India’s (RBI) efforts to tighten liquidity have given a bounce to the rupee today. But greater currency stability, even if sustained, will come at the cost of a further economic headwind. … India’s liquidity measures push policy rate …
16th July 2013
Today’s slight increase in India's wholesale price inflation will not have greatly alarmed policymakers, but the increase in consumer price inflation is a bigger worry. The chances of the Reserve Bank of India (RBI) cutting interest rates in the near term …
15th July 2013
Singapore’s economy posted its strongest gain in two years in Q2. We are raising our full-yearforecast for 2013 but, as this Weekly explains, last quarter’s good performance will not be thestart of a robust and sustained recovery. Nor is it a harbinger of …
Thailand’s government can afford to maintain its rice subsidy scheme indefinitely, as long as GDP growth holds up and rice prices do not collapse. However, doing so would put at risk the goal of balancing the budget by 2017 and limit room for spending in …
12th July 2013
Malaysia’s central bank (BNM) kept its policy rate unchanged at 3.0% at its meeting today. We think rates will remain on hold until early 2014, when we have pencilled in a hike. … Malaysia to wait until 2014 before hiking …
11th July 2013
Bank Indonesia (BI) today hiked both its main policy rate and the Fasbi rate by 50bp amid concerns about the currency and the outlook for inflation. Consumer price inflation is likely to rise as high as 8% y/y in the coming months after the government …
The Bank of Korea (BoK) kept its main policy rate on hold at 2.5% today, as expected. Nevertheless, with inflation set to remain weak and economic growth likely to stay lacklustre, we have pencilled in a rate cut before the end of the year. By contrast, …
The Bank of Thailand (BoT) kept its policy rate at 2.50% at its meeting today. We believe the central bank’s easing cycle has come to an end, though subdued economic activity means rate hikes do not look imminent either. … No more cuts …
10th July 2013
Pakistan has reached an initial agreement with the IMF for a US$5.3bn loan. The deal should avert a balance of payments crisis but, as this Weekly explains, the conditions attached to the loan will create a drag on economic growth. … IMF deal no …
8th July 2013
Despite China’s ongoing slowdown, growth in the rest of Emerging Asia should pick up over the next couple of years, helped by a combination of loose monetary policy and stronger global demand. The improving outlook means that the end of the region’s …
5th July 2013
The Reserve Bank of Australia (RBA) kept its cash rate on hold at 2.75% at its meeting today, as was widely expected. In its accompanying statement, the RBA stressed that it expects an improvement in the economy in 2014. This more upbeat tone makes it …
2nd July 2013
The June PMIs for Emerging Asia suggest the region’s manufacturing sectors continue to struggle. New orders were particularly disappointing. We think fragile global demand will make life difficult for Asia’s manufacturers at least until the end of the …
1st July 2013
Concerns that a manufacturing renaissance in the US could negate the benefits for Asia of stronger US growth are probably overblown. But with the euro-zone and Chinese economies still subdued, Asian exporters have not yet put their struggles behind them. …
Data released today suggest that Vietnam’s economy remains in the doldrums, amid a severe banking crisis which has led to a squeeze on credit. Problems in the banking sector are likely to weigh on the economy, with growth over the next couple of years …
27th June 2013
The main development of the past month has been the big sell-off in financial markets which has been triggered by worries about the consequences of a scaling back of QE in the US. Foreign investors pulled money out of the region in June, sending equities …
26th June 2013
Hopes that the policies of Prime Minister Abe’s new government will transform the outlook for Japan’s economy have lifted sentiment in the country. This Weekly takes a look at the implications of Abenomics for Emerging Asia. … What does Abenomics mean …
24th June 2013
As the Fed prepares to taper its program of quantitative easing, there are some concerns in Asia that it could trigger a messy re-run of 1994. We think these concerns are exaggerated. … Should Asia fear a repeat of …
21st June 2013
New Zealand’s economy grew slower than expected in Q1, as drought hit the agricultural sector. A pick-up is likely over the coming quarters, but weak export demand and tight fiscal policy will prevent a strong rebound. … New Zealand set for a moderate …
20th June 2013
