Filtered by Subscriptions: Asia Economics Use setting Asia Economics
The Philippines central bank (BSP) left its main policy rate on hold today at 4.0%, as expected. However, with inflationary pressures likely to remain moderate and global growth set to disappoint this year, we expect another rate cut before the end of the …
19th April 2012
Growth has weakened significantly in both Vietnam and India over the past 12 months. In the next couple of years, neither economy looks like recapturing the impressive growth rates that were recorded before the global financial crisis. … India and …
18th April 2012
The Reserve Bank of India cut its key policy rate by 50bp today in response to slower growth and a fall in underlying inflation. We suspect it will deliver a further 50bp of rate cuts by year-end as it shifts its emphasis towards supporting growth and as …
17th April 2012
While the world’s eyes were fixed on the North Korean rocket launch, last week’s election in the South brought into focus some of the challenges its policymakers face, in addition to dealing with their neighbour. … Challenges for South …
16th April 2012
The Monetary Authority of Singapore (MAS) unexpectedly tightened its policy stance today. The move was partly in response to Q1 GDP figures, also released today, which showed that the economy returned to strong growth. However, we believe the global …
13th April 2012
Having cut rates by a cumulative 100bp since October, Bank Indonesia (BI) left its main policy rate on hold at a record low level for the second consecutive month today, as widely expected. Although fuel price hikes now look unlikely, inflation still …
12th April 2012
The State Bank of Vietnam (SBV) today announced that it would be cutting interest rates by a further 100bp on Wednesday. The cut in interest rates, the second in as many months, comes amid recent falls in inflation and a sharp slowdown in economic growth …
10th April 2012
The recent increase in oil prices is putting the budgets of countries that operate fuel subsidy regimes under strain. Nevertheless, any meaningful reform of subsidy programmes across Asia looks unlikely. … Asia’s costly fuel subsidies to remain in …
9th April 2012
After decades as an international pariah, Burma is catching the eye of investors. Recent market-friendly reforms, an abundance of natural resources, and proximity to China and India are some of the country’s big attractions. However, Burma faces …
Events over the past year have taken the shine off India’s economy as the growth rate has slowed, reform efforts have been blocked and slow and opaque decision-making has undermined investor confidence. Unfortunately, this is unlikely to change before the …
4th April 2012
In the event of a hard landing in China, Australia would suffer a sharp fall in exports to its biggest trading partner. Global commodity prices would tumble given China’s importance for commodity markets, which would risk stunting Australia’s investment …
3rd April 2012
March PMIs for Asia suggested that a pick-up in trade is giving a boost to the region’s manufacturers. However, problems in the euro zone mean that the improvement could be short-lived. … March PMIs point to continued manufacturing …
Indonesia’s stock market and currency have been among the worst performing assets in Asia so far this year. The poor performance reflects worries over proposed cuts to fuel subsidies, which will increase inflation, renewed unease over corruption and …
2nd April 2012
As China develops, its manufacturing firms are moving into higher-value sectors. While this is a boon for low-wage Asian economies that represent a good alternative for low-end producers, manufacturers in middle-income countries will face sterner …
29th March 2012
After years of strong growth, China’s textile and apparel exports are now losing market share abroad. Indeed, high and rising labour costs in China mean the migration of low-end manufacturing out of China is likely to continue. Vietnam looks set to be the …
28th March 2012
GDP in Vietnam grew by just 4.0% y/y in the first quarter of 2012 – the weakest rate of expansion since the first quarter of 2009. The economy faces a difficult year in 2012 due to a combination of high inflation, problems in the banking sector, and …
26th March 2012
Australia stands out as one of the economies in Asia that might be most vulnerable to a renewed global banking crisis. Its high external debt and current account deficit make it reliant on foreign funding. However, the strength of the banks that undertake …
The pick-up in oil prices in recent weeks has caused some to fear that inflation in Asia will soon rise sharply. These fears are over-blown. Even if oil prices stayed at current levels, inflation would continue to ease across the region. … High oil prices …
Today’s GDP data show that New Zealand’s economy grew at a sluggish pace in Q4. Growth is likely to be weak in the near term as the temporary boost from the Rugby World Cup unwinds, but post-earthquake rebuilding should support the economy later this …
22nd March 2012
The Bank of Thailand (BoT) kept its policy rate at 3.0% today, as expected. The speed of the local recovery from last year’s floods and global developments will determine monetary policy decisions in coming months. We expect domestic demand to strengthen …
21st March 2012
Growth in emerging Asia looks to have picked up in Q1. Strength in the US is helping to offset weakness in Europe for Asia’s exporters. There are encouraging signs of domestic demand improving early in 2012, even in many of Asia’s most trade-reliant …
20th March 2012
The recent run of improved data from the US has led us to raise our US GDP growth forecasts for 2012 and 2013. But we believe that improved prospects for the US will make little difference to emerging Asia. Global growth is still likely to be below trend …
19th March 2012
The Indian budget for 2012/13, presented to parliament today, incorporates some significant tax hikes and should be viewed positively by the markets and the central bank. The main concern, though, is that it does nothing to tackle subsidy costs. … India …
16th March 2012
The Reserve Bank of India (RBI) left its repo rate unchanged at today’s meeting and took a hawkish tone in its policy statement. Given that measures of activity have picked up recently and inflation is set to fall only gradually in the coming months, we …
15th March 2012
The central bank of Sri Lanka (CBSL) left its repurchase rate on hold at 7.5% today. With the central bank still assessing the impact of a number of major policy changes introduced last month, the decision was expected by all seven analysts in the …
14th March 2012
Asia was hit by several natural disasters in 2011, most notably the tsunami that struck Japan in mid- March. These events were foremost human tragedies, but they also had an economic impact. While Thailand’s economy was worst affected, it is already on …
12th March 2012
After a dismal year for fiscal policy, India’s Finance Minister Pranab Mukherjee will try to reestablish his credentials for sound fiscal management when he presents the budget to parliament on Friday 16th. But we fear that the budget will be longer on …
Bank Negara Malaysia (BNM) held its policy rate at 3% today, as was expected. Inflation has eased in the last four months, but a general improvement in economic data both at home and abroad has reduced the urgency for rate cuts. We still expect BNM to …
9th March 2012
The Bank of Korea (BoK) kept its policy rate at 3.25% today, as expected. The central bank is weighing downside risks to growth against the threat of higher oil prices pushing up inflation. Our view is that Korea’s growth will be sluggish this year and …
8th March 2012
Having cut interest rates by a cumulative 100bp over the past six months, Bank Indonesia (BI) left rates on hold today, as expected. With upcoming cuts to fuel price subsidies likely to push inflation to around 7% y/y by end-2012, we now believe BI’s …
Today’s GDP data show that Australia’s economy grew by less than expected in Q4. Nonetheless, Australia outpaced the US, euro-zone and UK over 2011 as a whole. While we expect the global economy to falter later this year, there is plenty of scope for …
7th March 2012
The State Bank of Vietnam (SBV) today announced that it would be reducing its key policy rate “over the next few days”. The cut comes after sharp falls in inflation over the past six months and is designed to boost both the slowing economy, and a …
6th March 2012
The trend in Asia has been towards loosening policy recently. However, signs of stronger global growth and the pick-up in oil prices are likely to persuade central banks across the region to keep their interest rates on hold this week. We expect the …
5th March 2012
February PMIs for Asia were positive, boosting hopes that the region’s industrial sector is now on the road to recovery. However, with global growth likely to disappoint this year, any rebound in manufacturing activity is likely to be limited. … …
2nd March 2012
The Philippines central bank (BSP) cut its policy rate by a further 25bp to 4.0% today, taking the overnight rate back to the trough of the previous cycle. Lower interest rates are needed to support the economy, which has been hit by a slump in exports, …
1st March 2012
Data published today reveal a further drop in India’s GDP growth in the last quarter of 2011. Moreover investment has stalled, setting back hopes that trend growth will rise towards Chinese levels. … India’s growth rate slows, recovery likely to be …
29th February 2012
The return of global risk appetite has helped to push up asset prices across Asia. If we are correct that the crisis in the euro-zone will worsen again later this year, global risk appetite is likely to reverse. However, in the event the euro-zone …
28th February 2012
Recent oil price increases are not a big threat to emerging Asia. The inflationary impact will be small even if prices remain at current levels. Asian economies are relatively oil-dependent but their stronger fundamentals mean they can withstand high …
Falling inflation gives the State Bank of Vietnam (SBV) scope to cut interest rates to support growth. However, large cuts could end up destabilising the fragile economy. The SBV will need to be careful how it treads. … Rate cuts are coming in …
27th February 2012
Almost all countries in emerging Asia have now released their Q4 GDP figures. Growth slowed across most of the region, mainly due to weakness in external demand. The recent improvement in the US, a pick-up in Asia’s PMIs, and the easing of supply-chain …
23rd February 2012
The major impact of euro-zone break-up on emerging Asia would come from the resulting weakness of export demand. If the break-up was relatively smooth and the US continued to grow, as we think is possible, most Asian policymakers have the capacity to …
Economic growth in the final quarter of last year was disappointing for most economies in emerging Asia. Although risks to growth are generally on the downside, a closer look at Q4 GDP data suggests that the headline figures understate the true strength …
22nd February 2012
Today’s Q4 GDP data show that, due to widespread floods, Thailand’s economy suffered a bigger quarterly contraction in late-2011 than it did in either the 2008-09 global crisis or the Asian Financial Crisis of the late-1990s. Domestic demand should …
20th February 2012
Singapore’s FY2012 budget, released on Friday, focused on medium-term issues rather than providing a near-term boost for the economy. The outlook for Singapore’s export-oriented economy is not as bad as it was ahead of the 2008-09 crisis, especially in …
Malaysia’s economy grew at a slower pace in Q4 than it did in Q3, in line with the regional trend. We expect Malaysia to suffer a double hit from softer exports and lower commodity prices this year, while risks to domestic demand are also skewed to the …
15th February 2012
The provisional Q4 euro-zone GDP figures confirmed that the economy contracted at the end of last year, albeit by a bit less than had been feared. The 0.3% quarterly fall was slightly better than the consensus forecast of -0.4%, but the first decline in …
The drop in inflation to 6.6% y/y in January results primarily from base effects and falling food prices. Nevertheless, there is sufficient evidence that underlying inflationary pressure has eased for the Reserve Bank of India (RBI) to cut the repo rate …
14th February 2012
Asia’s rapid economic rebound following the 2008-09 global crisis has led to sharp falls in unemployment over the past couple of years. This has raised hopes that robust household spending will support the region’s economies in the event that global …
13th February 2012
The Bank of Korea (BoK) kept its policy rate at 3.25% today, as expected. Our view is that Korea’s policymakers are likely to shift their focus away from tackling inflation towards supporting growth this year. The upshot is that, in contrast to the view …
9th February 2012
Bank Indonesia (BI) cut its reference rate again today by 25bp. The decision was somewhat unexpected. The central bank had already cut rates by a cumulative 75bp in the final quarter of last year and there is a growing risk that inflation will rebound …
