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Asia may have less to gain than other parts of the world from a coronavirus vaccine, given successes in containing the new coronavirus. A widely-distributed and effective vaccine would nonetheless give a huge boost to tourist industries and it would …
10th November 2020
Joe Biden is likely to take a different approach to trade relations than Donald Trump, but his election will not reinvigorate globalisation, which has stalled over recent years. This will act as a headwind for the region’s poorer economies. Joe Biden …
9th November 2020
Bank Negara Malaysia (BNM) left its main policy rate on hold at 1.75% today, but with a new set of restrictions to combat a second outbreak of the virus dragging on the economy, we doubt this marks the end of the central bank’s easing cycle. Of the 21 …
3rd November 2020
Asian exports have continued to defy gravity. Despite the biggest slump in the global economy since the Second World War, regional exports are already back to their pre-crisis level. The resilience of exports in much of Asia has helped offset some of the …
28th October 2020
The Central Bank of Sri Lanka (CBSL) left both its deposit and lending rate on hold at 4.50% and 5.50% respectively at its meeting today but, given the poor outlook for the economy, we think the easing cycle has further to run. The decision was correctly …
22nd October 2020
With the US election result unlikely to have immediate ramifications for US GDP, the main issue for much of Asia is how it affects trade policy. A Joe Biden presidency would be less confrontational towards Asian economies outside China. By contrast, a …
21st October 2020
The renewed risk of domestic political unrest in Thailand following the declaration of a “severe” state of emergency could act as a further drag on the already beleaguered economy. In response to student-led protests calling for Prime Minister Prayuth …
15th October 2020
The COVID-19 crisis has led to a ballooning of current account surpluses across Emerging Asia that is putting upward pressure on currencies. The shift to bigger external surpluses could also land the region in hot water with the US Treasury as it prepares …
14th October 2020
The Bank of Korea (BoK) left its main policy rate on hold at 0.50% today and, with the economic recovery holding up relatively well, further rate cuts seem unlikely. Instead the focus of the BoK is likely to shift to cushioning the impact of loose fiscal …
Bank Indonesia (BI) left interest rates on hold at 4.0% today, but it is too soon to call an end to the easing cycle. With the economy in need of further support, we think the central bank will resume its easing before the end of the year. BI left …
13th October 2020
The near-term outlook for Indonesia’s economy is dreadful. A failure to contain the virus means the country will experience one of the slowest recoveries in the region. But a series of landmark reforms passed by parliament yesterday could set the stage …
6th October 2020
The central bank in the Philippines (BSP) left its main policy rate on hold at 2.25% today for a second consecutive meeting, but with the economic recovery proving to be one of the slowest in the region, we doubt the Bank has finished easing yet. The …
1st October 2020
Continued trade tensions between the US and China are providing a significant boost to economic prospects in Taiwan and Vietnam. Having also successfully contained the virus without significant economic damage, Taiwan and Vietnam are likely to be the only …
25th September 2020
Asian central banks have taken their foot off the gas in recent months – no central bank in the region has cut rates since July. But we think this represents a pause rather than an end to the easing cycle. With GDP still well below pre-crisis levels in …
24th September 2020
The Bank of Thailand’s (BoT) decision to leave interest rates unchanged at 0.5% came as no surprise, and rates look set to remain unchanged for some time to come. The central bank hinted at further measures to support demand, but the onus will be on the …
23rd September 2020
Success in bringing the COVID-19 outbreak under control in Pakistan, Sri Lanka and to a lesser extent Bangladesh has enabled activity in these places to rebound much faster than in India, where new infections continue to surge. This supports our view that …
22nd September 2020
Pakistan’s central bank (SBP) left interest rate unchanged today at 7.0% and appeared to signal the end of its recent easing cycle. With the economy recovering well from the coronavirus crisis and inflation concerns increasing, we expect rates to remain …
21st September 2020
Bank Indonesia’s (BI) decision to leave interest rates unchanged today at 4.0% shows that it is prioritising financial stability over supporting the economy. Further easing is possible later in the year if the currency stabilises, but the pace of rate …
17th September 2020
With the economy holding up relatively well, the decision by Taiwan’s central bank (CBC) to leave interest rates on hold came as no surprise. Further rate cuts are unlikely, and we expect interest rates to remain on hold for the foreseeable future. The …
Bank Negara Malaysia (BNM) left its main policy rate on hold at 1.75% today, but with the economy likely to remain weak for some time to come, we doubt this marks the end of the Bank’s easing cycle. Today’s meeting was always likely to be a close call. …
10th September 2020
Despite Thailand’s success in containing the coronavirus, the country is likely to record one of the biggest falls in GDP in the region this year. A collapse in tourism and a slump in automotive demand are the two main factors holding back the economy. …
7th September 2020
Proposed changes to Bank Indonesia’s mandate, which include a shift to focus more on growth and unemployment, could lead to major changes in how the central bank operates. However, given the country’s high level of foreign currency debt, policymakers …
2nd September 2020
The recent spike in coronavirus cases in Vietnam has had only a small negative impact on the economy. With the virus now seemingly under control again, Vietnam is still likely to be one of the few countries in the world to grow this year. Having gone 99 …
Both Korea and Japan are experiencing second waves, but a stronger shift in consumer behaviour in Korea means the outbreak there is likely to have a larger impact on growth. As such, we’ve revised down our GDP forecast for Korea but kept it the same for …
27th August 2020
The Bank of Korea (BoK) left its policy rate on hold at 0.50% today but gave hints at the press conference that fresh rate cuts were on the table. We have pencilled in a cut in Q3 as a result and are sticking with our view that the BoK will expand …
The central bank of the Philippines (BSP) left its main policy rate on hold at 2.25% today, but with the pandemic weighing heavily on the economy, we doubt the Bank has finished easing. Today’s decision to hold follows a 50bp cut at the BSP’s last meeting …
20th August 2020
The Central Bank of Sri Lanka (CBSL) left both its deposit and lending rates on hold at 4.50% and 5.50% respectively at its meeting today, but given the poor outlook for the economy and mounting political pressure, we think the easing cycle has further to …
Bank Indonesia’s (BI) decision to leave interest rates unchanged at 4.0% suggests that it is waiting to see if the recent stabilisation in the rupiah holds. Provided it does, we think further easing is likely over the coming months as the economic …
19th August 2020
The high-frequency data that we track suggest that the recovery is most advanced in China and Taiwan, with India, Indonesia and the Philippines bring up the rear. Recent virus outbreaks in Hong Kong and Vietnam have put their recoveries into reverse. In …
12th August 2020
The landslide victory by Sri Lanka People’s Party (SLPP) will allow incumbent President Rajapaksa to consolidate power. This is likely to lead to an increase in corruption and nepotism and will also add impetus to Mr Rajapaksa’s plans to “restore …
7th August 2020
The Bank of Thailand’s (BoT) decision to leave interest rates unchanged at 0.5% despite the very poor outlook for the economy suggests further rate cuts are unlikely. In its statement, the BoT hinted at further measures it could take to support growth, …
5th August 2020
China’s rapid economic recovery from the Global Financial Crisis did not play as big a role as is commonly assumed in supporting growth in the rest of Asia. We doubt a strong rebound in China from the current crisis will provide much support to demand in …
24th July 2020
Bank Indonesia’s (BI) decision to cut interest rates today suggests that for now at least it is prioritising the economy over supporting the rupiah. We think further rate cuts are likely over the coming months, but the pace of easing is set to be gradual. …
16th July 2020
The Bank of Korea (BoK) left its policy rate on hold at 0.50% today and while it did not unveil any further unconventional policy measures, the Bank gave hints it could employ them in future. With growth likely to disappoint, we still expect a more …
The Central Bank of Sri Lanka (CBSL) cut both its deposit and lending rates by 100bps to 4.50% and 5.50% respectively at its meeting today, and given the poor outlook for the economy, we think the easing cycle has further to run. The decision was …
9th July 2020
Bank Negara Malaysia (BNM) cut its main policy rate by 25bps to 1.75% today, and with the economic recovery still in its infancy, we doubt this marks the end of the central bank’s easing cycle. The decision to cut was no surprise, 18 of the 25 analysts …
7th July 2020
The central bank in the Philippines (BSP) today cut its policy rate by a larger-than-expected 50bps, to 2.25%, and with economic activity unlikely to recover fully anytime soon, we expect further easing. The timing of today’s decision was a surprise given …
25th June 2020
The Bank of Thailand’s (BoT) decision to leave interest rates unchanged at 0.5% today despite the dire outlook for the economy suggests that further cuts to the policy rate are unlikely. Instead, the emphasis over the coming months is likely to be on what …
24th June 2020
Taiwan’s central bank (CBC) kept its policy rate on hold today at 1.125%, but given the poor outlook for the economy, we think it will cut again soon. Today’s decision to keep rates at 1.125% was unanimous. The decision was correctly predicted by 15 out …
18th June 2020
Bank Indonesia (BI) cut interest rates today for the first time in three months, but the modest 25bp cut suggests that it remains worried about the outlook for the rupiah. Given the bleak growth outlook we expect further gradual easing over the coming …
The high-frequency data that we track suggest that while all countries in the region are now rebounding, the pace of recovery varies significantly. The recovery is most advanced in China, Taiwan and Vietnam. The Philippines, Indonesia and India are doing …
17th June 2020
Despite the sharp rise in the unemployment rate last month, there are signs that the Korean labour market has turned a corner. This adds to evidence that the economy has now bottomed out. The unemployment rate shot up from 3.8% in April to 4.5% in May, …
10th June 2020
Lockdowns are being eased in India, Pakistan and Bangladesh without any sign that coronavirus infections are being brought under control. Economic recoveries will face greater headwinds than in places where the virus has been contained as a result. But …
9th June 2020
With domestic infections contained, the main way in which the global pandemic has threatened Taiwan economically is through weakness in external demand. Exports have held up much better than we had originally anticipated, and so we are raising our 2020 …
8th June 2020
A sharp slowdown in Vietnam this year is unavoidable, but with the virus contained and with exports holding up better than might have been expected, we are raising our 2020 GDP growth forecast. Vietnam is likely to be one of the few economies anywhere in …
2nd June 2020
Given the collapse in the global economy, merchandise exports from Emerging Asia have so far held up better than might have been anticipated. The fact that the global slump has been driven by services rather than manufacturing and the strength of demand …
29th May 2020
The Bank of Korea (BoK) cut its policy rate by 25bps to a new record low of 0.50% and gave some vague assurances that it would act to keep long term government bond yields down. With growth likely to disappoint and conventional policy reaching its limit, …
28th May 2020
The impact of the crisis so far has been overwhelmingly disinflationary, and with demand likely to be depressed for a long time to come, inflation is set to remain very weak. A period of entrenched deflation is a growing concern in some countries, most …
27th May 2020
A surge in pharmaceutical production has provided a significant boost to Singapore’s economy over the past couple of months, but this is likely to prove temporary and will not prevent a massive contraction in the economy this year. April data show that …
26th May 2020
Indonesia is making much slower progress than others in the region in containing the spread of the coronavirus. This will hold back the economic recovery. We are cutting our GDP growth forecast for this year from -1% to -5%. Many countries in Asia appear …
21st May 2020