Filtered by Subscriptions: Asia Economics Use setting Asia Economics
Wholesale price data for October, released today, suggest India’s inflation rate is still not at a turning point. Meanwhile, recent evidence shows economic activity has slowed more steeply than expected, increasing the risk that GDP growth will fall short …
14th November 2011
Concern is growing that the ongoing debt problems in the euro-zone could lead to another global financial and economic crisis. Remittances should provide a relatively stable source of income, providing some support for the region’s economies. During …
Policy rates were left unchanged in Korea and Malaysia today, but both central banks are becoming increasingly concerned about the downside risks for exports. We expect policymakers in both countries to shift their focus away from tackling inflation …
11th November 2011
Bank Indonesia (BI) unexpectedly cut its policy rate today by 50bp to 6.0%. Following a 25bp cut last month, strong third quarter GDP growth and continued rapid credit expansion, we think the central bank is loosening monetary policy too aggressively. … …
10th November 2011
Indonesia’s economy continued to grow strongly in the third quarter amid buoyant domestic demand and booming exports. Although global demand looks unlikely to remain so supportive for long, Indonesia should remain one of the best performing economies in …
7th November 2011
We have below-consensus forecasts for interest rates and GDP growth in emerging Asia next year. The main reason for the difference relates to our views on growth in the developed world and commodity prices, which we see falling more sharply than most …
Thailand’s flood situation deteriorated in early November, with water breaking through defences and flowing further into Bangkok and its surrounding provinces. Agriculture, manufacturing and tourism have all been badly affected. With …
The Reserve Bank of Australia (RBA) lowered its cash rate by 25bp to 4.5% today,moving its policy settings towards a more neutral rather than restrictive stance. We expect conditions outside of the resources sector to remain weak and see fears for the …
1st November 2011
October manufacturing PMIs for Taiwan, Singapore, Australia, Korea and India released today remained weak, and are at or around their lowest levels since the 2008-09 global financial crisis. With global demand set to disappoint next year, growth in …
Taiwan always struggles when global demand slows and the coming year will be no exception. But the relative weakness of Taiwan’s labour market is a second reason to think that GDP growth in 2012 will come in well-below most expectations. … Export weakness …
31st October 2011
Despite the deal agreed by European leaders last week, we are far from sanguine about prospects for the euro-zone and expect further turmoil in global financial markets. In the event of another financial crisis, Asia’s currencies and equities would fall …
Today’s Q3 GDP data from Korea confirm that the economy grew at a sub-trend pace in the third quarter. Growth is unlikely to pick up sharply over the next few quarters amid weak global conditions, while Korea’s inflation should fall back into its target …
28th October 2011
The Reserve Bank of New Zealand (RBNZ) kept its cash rate at 2.5% today, as was widely anticipated. Post-earthquake rebuilding over the next few years will lift local price pressures and so the RBNZ still expects to hike once external economic and …
We have cut our growth forecast for Vietnamese GDP next year to a below-consensus 5%. The cut is due to a combination of persistently high inflation, continued monetary policy tightening, mounting problems in the banking sector, and weaker export demand. …
27th October 2011
While the Reserve Bank of India’s (RBI) decision to hike its repo rate by a further 25bp today was widely expected, what is more surprising is how explicitly it signalled that this is likely to be the last hike of the cycle. In fact, we expect slower …
26th October 2011
In the event of a global financial crisis stemming from the sovereign debt problems in Europe, there will be major concerns over Indonesia’s exposure to volatile capital flows, its vulnerability to lower commodity prices and the impact on the country’s …
25th October 2011
Supply-chain disruptions and weak demand for electronics had pulled down export growth in emerging Asia even before worries about the global outlook intensified recently. But exports have fared well in several countries, particularly India, Indonesia and …
As fears mount over the outlook for the global economy and inflationary pressures continue to ease, policymakers across the region are increasingly looking to support demand. Over the past month, governments in the Philippines and Malaysia have announced …
22nd October 2011
Emerging markets are not immune from the deepening debt crisis in the developed world, but most are well-placed to deal with the fallout. China faces a difficult structural transition of its own but, along with the rest of emerging Asia, has policy …
21st October 2011
The central bank in the Philippines (BSP) left its policy rate on hold at 4.5% today, as expected. However, with inflation set to fall over the coming year, economic activity weak and fears intensifying over the global outlook, it will not be long before …
The Bank of Thailand (BoT) kept its one-day repo rate at 3.5% today, as expected. The BoT’s concerns are rightly shifting from tackling inflation to supporting growth. Most analysts predict that the policy rate will be kept on hold throughout next year. …
20th October 2011
Governments in Malaysia and the Philippines have recently announced big increases in spending to support their economies. But in the event that the developed world slips back into recession, not every country in the region will be as willing or able to …
18th October 2011
Wholesale price inflation data for India, released today, suggest the Reserve Bank of India (RBI) is likely to go ahead and raise its repo rate by a further 25bp, to 8.5%, at its next rate-setting meeting on 25th October. This is despite mounting evidence …
15th October 2011
The Monetary Authority of Singapore (MAS) loosened its policy settings today by targeting a slower pace of currency appreciation. Q3 GDP figures, also released today, show that the economy had little momentum going into the final quarter of the year. We …
The Bank of Korea (BoK) kept its base rate at 3.25% today, as expected. The BoK’s commentary suggests it still expects to resume rate increases once concerns over the outlook for the global economy abate. We think the chances of that happening are low. …
14th October 2011
Bank Indonesia (BI) unexpectedly cut its reference rate by 25bp to 6.5% today. We expect difficult economic conditions in the developed economies and falling inflation in Indonesia to bring more policy loosening next year. Much of the rest of emerging …
12th October 2011
Inflation appears to have peaked in most of emerging Asia, opening the door for rate cuts across much of the region next year. In this week’s key events, policy rate decisions from Sri Lanka, Indonesia and Korea will illustrate how the balance of concern …
11th October 2011
A slowdown in developed economies in 2012-13 is set to pull down growth in emerging Asia to a below-trend pace. However, the region’s healthy fundamentals mean that emerging Asia should once again be the fastest growing area of the world economy. …
6th October 2011
September PMIs for Asia released over the past couple of days remained weak. Although Asia is relatively well-placed to withstand weaker global demand, the recent PMIs reinforce our view that Asian growth will slow to below trend next year. … Asia …
5th October 2011
The Reserve Bank of Australia (RBA) held its cash rate at 4.75% today, as was widely anticipated. But given the shift in the tone of the RBA’s commentary and our recent downgrades to global growth forecasts, we have revised our view and no longer see …
Private sector credit growth across emerging Asia has accelerated sharply since the economic recovery began in mid-2009. With domestic private sector credit as a share of GDP in emerging Asia at an all-time high, there are growing concerns that at least …
4th October 2011
Asia’s currencies have fallen sharply against the US dollar this month and we expect the downward pressure to continue in the near term. However, once the global financial situation starts to stabilise and risk appetite recovers, Asia’s currencies look …
27th September 2011
Owing to our recent downward revisions to growth in the US and euro-zone in 2011-12 we have cut our forecasts for growth across emerging Asia. However, in a reflection of the region’s healthy fundamentals, we still think Asia will perform relatively well …
23rd September 2011
Asian markets would of course be vulnerable to a retreat of global capital if the debt crises in Europe and the US intensified. But any reversal of flows will be temporary. Dealing effectively with inflows is likely to be a central policy challenge in the …
20th September 2011
The Reserve Bank of India (RBI) raised its repo rate by 25bp to 8.25% today, as anticipated, citing further increases in core inflation. Provided the euro-zone crisis does not escalate dramatically in the coming weeks, we think the RBI is likely to …
17th September 2011
The Reserve Bank of New Zealand (RBNZ) left its key interest rate at 2.5% today, as anticipated, citing the deterioration in external conditions and escalation in financial market risks. The RBNZ still expects to be able to reverse the “insurance cut” …
16th September 2011
Given the sharp deterioration in the global economic outlook in the past couple of months, the Reserve Bank of India (RBI) will give serious consideration to downside risks to growth when it meets on Friday. Nonetheless, for several reasons we doubt India …
13th September 2011
Central banks in Indonesia, Malaysia, Korea and the Philippines all kept their main policy rates on hold today, as expected, reflecting heightened concern over the outlook for the global economy. This year, more policy tightening is only likely in Korea, …
9th September 2011
Economic growth rebounded strongly in the second quarter, strengthening our view that Australia’s recovery is intact despite the fall in output in Q1. Worries about the global outlook obviously add some uncertainty. But, for now, the Reserve Bank of …
8th September 2011
A combination of increasing political violence in Karachi, falling cotton prices, an unsustainable fiscal position and high inflation mean the outlook for Pakistan’s fragile economy remains bleak. … Troubles mount for Pakistan’s crisis-hit …
7th September 2011
While the Reserve Bank of Australia (RBA) is widely expected to leave its cash rate at 4.75% on Tuesday, the swap market suggests that the cash rate will be aggressively cut over the next 12 months. This seems unlikely to us. Household spending has held …
6th September 2011
The Philippines is the latest country within emerging Asia to report weak Q2 GDP data. Nonetheless, as with elsewhere in the region, growth should rebound in coming quarters as temporary supply-chain problems following Japan’s mid-March disaster continue …
1st September 2011
India’s second quarter GDP figures, which showed only a marginal deceleration from the first quarter, should dispel any concerns in the Reserve Bank of India (RBI) that the economy is struggling to cope with tighter monetary policy. Consequently, the RBI …
31st August 2011
India’s Q2 GDP data will be released on Tuesday and are likely to show that growth slowed. We forecast growth of 7.5% y/y in Q2, down from 7.8% in Q1. Monthly output data suggest that the slowdown will have been led by the manufacturing sector. …
30th August 2011
Q2 GDP figures reported so far within emerging Asia have tended to be weak, with some analysts suggesting that sluggish growth in the US and euro-zone have stalled growth in Asia. This seems premature to us. Temporary supply-chain disruptions following …
27th August 2011
August price data highlight growing concerns over the stubbornly-high rate of inflation in Vietnam. Despite the backdrop of a weak global economy, we believe that the State Bank of Vietnam (SBV) is likely to increase its interest rates further over the …
26th August 2011
In spite of growing downside risks to global growth, the Bank of Thailand (BoT) raised its repo rate by 25bp to 3.5% today. The BoT’s decision-making is being heavily influenced by the outlook for local fiscal policy. We expect another 25bp hike in one of …
25th August 2011
Thailand is the latest country within emerging Asia to have reported weak GDP data for the second quarter. Nonetheless, worries that slower growth in the West has already stalled growth in Asia look overblown to us. … How bad was Q2 GDP in Thailand and …
23rd August 2011
The Bank of Thailand announces its latest interest rate decision on Wednesday. Policymaking has been complicated by global worries intensifying at a time when local fiscal policy looks set to be loosened. On balance, we expect the repo rate to be kept at …
The Central Bank of Sri Lanka (CBSL) kept interest rates on hold today, as expected. Although headline inflation crept up slightly in July, the central bank remains confident that inflation will start to fall again soon, while it remains wary of the …
20th August 2011
