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Figures released today suggest that economic growth remained broadly stable last quarter, but we don’t have much faith in the official data. Our own in-house activity tracker shows that the economy is performing worse than what the official data suggest. …
6th November 2023
Headline inflation rises again Figures published this week for Korea show that headline inflation rose from 3.7% y/y in September to 3.8% last month – a third consecutive monthly rise. Inflation has now been above the BoK’s target for 31 consecutive …
3rd November 2023
Despite the sharp downward pressure on the ringgit, Malaysia’s central bank (BNM) left policy rates unchanged (at 3.0%) today. We expect the central bank to keep the policy rate on hold for the rest of this year and throughout 2024. The decision was …
2nd November 2023
The October PMIs for Emerging Asia generally dropped back further inside contractionary territory. The outlook for manufacturing in the region remains bleak in the near term as elevated inventory levels and weaker foreign demand are set to curtail …
1st November 2023
Emerging Asia Chart Pack (Oct. 2023) …
31st October 2023
Economic growth in Taiwan accelerated sharply in Q3, driven primarily by a jump in exports. However, we don’t think the strength of the recovery will last – we expect growth to slow over the next two quarters due to renewed weakness in external demand and …
Taiwan’s growth moderated in Q3 Activity data published this week for Taiwan paint a mixed picture of the economy. Consumer demand is coming off the boil but exports have rebounded. More details will be available in the Q3 GDP figures due next week. …
27th October 2023
The central bank (BSP) in the Philippines today raised its main policy rate by 25 bps (to 6.50%) in an out-of-cycle interest rate decision. While we had expected an interest rate hike at the upcoming scheduled meeting in mid-November, today’s out of cycle …
26th October 2023
Economic growth in Korea was stronger than expected in Q3 but we think the economy is set to weaken in the near term as support from external demand fades while tight fiscal and monetary policy continue to curtail domestic demand. According to the advance …
Reforms introduced by President Joko Widodo (commonly known as Jokowi) should enable the economy to continue growing rapidly once he steps down next year. The key question as the election approaches is whether his successor will build on the progress he …
24th October 2023
Continued currency weakness Asian currencies have continued to weaken against the US dollar over the past week on the back of a further rise in US bond yields and growing concerns about the worsening situation in the Middle East. Most are now down by 1-6% …
20th October 2023
Initial estimate points to Q3 rebound, but strong growth unlikely to be sustained GDP figures for Malaysia published today showed that the economy rebounded unexpectedly in the third quarter of the year, with y/y growth increasing to 3.3% from 2.9% the …
In a surprise move, Bank Indonesia (BI) today hiked its main policy rate by 25bps (to 6.0%) in an attempt to support the currency. But there is a good chance this will be a case of “one and done”. Our forecast is that US bond yields will drop back over …
19th October 2023
Surprise hike aimed at supporting the currency In a surprise move, Bank Indonesia (BI) today hiked its main policy rate by 25bps (to 6.0%), and made clear that supporting the currency would remain its key priority over the coming months. However, with …
The Bank of Korea today left its policy rate unchanged (at 3.5%), and while Governor Rhee left open the possibility of further interest rate hikes, there are signs that some members of the central bank are becoming more dovish. With growth struggling but …
On hold again, central bank in no rush to loosen policy The Bank of Korea (BoK) today left interest rates unchanged (at 3.5%) for a sixth consecutive meeting. The decision came as no surprise and was correctly predicted by 49 economists polled by …
Malaysia budget to weigh on GDP, add to inflation Malaysia’s budget for 2024, which was unveiled in parliament today, envisages a modest tightening of fiscal policy, with the deficit set to narrow from an estimated 5.0% of GDP this year to 4.3% in 2024. …
13th October 2023
The Monetary Authority of Singapore (MAS) kept monetary policy settings unchanged today which was in line with both our and consensus expectations. While another hold is likely in January, further falls in the core inflation rate and weaker growth are …
Headline inflation has jumped across much of Emerging Asia over the past couple of months on the back of rises in food and fuel prices. This won’t prompt central banks to resume tightening (the Philippines is the exception). However, the rise in inflation …
11th October 2023
The Asian Tiger economies of Korea, Singapore, Hong Kong and Taiwan are likely to be among the biggest beneficiaries of the emergence of new AI technologies. But the boost will not be enough to offset the drag from worsening demographics, and we still …
9th October 2023
Singapore’s struggling economy Singapore’s economy has struggled in recent quarters, and only narrowly avoided falling into recession in Q2. Preliminary GDP figures to be published on Friday are likely to show the weakness continued in the third …
6th October 2023
The central bank (CBSL) today cut interest rates by a further 100bps. With inflation low and the economy still very depressed, further easing is likely over the coming months. Today’s 100bps cuts take the lending and deposit rates to 10% and 11% …
5th October 2023
The latest activity data from Korea were downbeat. Although industrial production grew strongly, the manufacturing PMIs, along with the export figures and retail sales data, all point to continued weakness. However, with inflation rising again last month, …
The sell-off in bond markets has taken a breather today, helped in part by softer data on the US labour market. However, the scale of the moves over the past week has invoked comparisons to previous financial crises that have been caused by sharp moves in …
4th October 2023
Construction spending in Korea is falling sharply as developers respond to an oversupply of new homes by cutting back on new projects. The sector’s weakness will remain a major drag on economic growth throughout next year. Property prices in Korea dropped …
3rd October 2023
The PMIs for September suggest that manufacturing activity across Emerging Asia remained weak last month. Worryingly, the PMIs point to a further rise in price pressures across the region, with the input and output price subcomponents both rising. The …
2nd October 2023
Infrastructure remains a major weakness Indonesia’s first high-speed train line is due to become operational this Sunday, when a WHOOSH bullet train departs the Indonesian capital of Jakarta for the provincial capital of Bandung, 88 miles away. Journey …
29th September 2023
Figures released today show that the worst for Vietnam’s economy is now over, but that growth remains subdued by past standards. With the economy on the mend, but inflation becoming a growing concern, we have taken out the rate cuts we originally had …
Emerging Asia Chart Pack (Sep. 2023) …
27th September 2023
Final hike of the cycle The Bank of Thailand (BoT) today raised interest rates by a further 25bps (to 2.50%), but hinted this was likely to be the last hike of the cycle. With inflation below target and headwinds to the economic recovery mounting, we …
Overview – GDP growth across most of Emerging Asia has struggled over the past year and we expect growth to remain weak in the near term as tight monetary policy at home and subdued activity abroad weigh on demand. Next year should be a little better, but …
25th September 2023
Loose fiscal policy to support Thai growth Thailand’s new government this week unveiled a budget for fiscal year 2024 (Oct. 2023 – Sep. 2024) which envisages a significant loosening of policy. The centrepiece is a 10,000 baht (US$275) cash handout to all …
22nd September 2023
Policy easing pushed back to 2024 Taiwan’s central bank (CBC) today left its policy rate unchanged at 1.875% for a second consecutive month. Despite the poor outlook for growth, lingering concerns about inflation have prompted us to shift the timing of …
21st September 2023
Rupiah key concern for central bank Bank Indonesia (BI) today left its main policy rate unchanged at 5.75%, and made clear that supporting the rupiah would remain its main priority over the coming months. While there is still a good chance the central …
BSP unlikely to resume tightening cycle despite inflation concerns The central bank (BSP) in the Philippines today left its main policy rate unchanged (at 6.25%), but warned that it may need to resume its tightening cycle soon. While we think monetary …
The weeks leading up to Taiwan’s presidential election in January could be marked by another rise in tensions with China. The most likely outcome of the vote is another DPP presidency. While Lai Ching-te would be a new pair of hands, his election wouldn’t …
20th September 2023
Recent data show Sri Lanka’s economy is now rebounding strongly from last year’s political and economic crisis. We expect the recovery to continue over the coming months, helped by the sharp drop in inflation, lower interest rates, a recovery in tourism …
15th September 2023
Hold likely in Philippines despite jump in inflation The scheduled highlights of the coming week are monetary policy meetings in Indonesia, Taiwan and the Philippines. While Indonesia and Taiwan are very likely to leave policy settings unchanged, the …
Headline inflation jumps in August The long and steady decline in inflation across Emerging Asia came to an end last month, with headline inflation picking up in all six countries that have so far reported August price data. (See Chart 1.) Chart 1: …
8th September 2023
This page has been updated with additional analysis since first publication. The decision by Malaysia’s central bank (BNM) to leave the overnight policy rate unchanged at 3.0% came as no surprise. Despite the poor near term outlook for economic growth, …
7th September 2023
The jump in inflation in August was driven by temporary factors and we don’t think this marks the start of a sustained rise in inflation, especially since core inflation continued to drop back. Nevertheless, the rise in inflation last month reduces the …
5th September 2023
A poor start to Q3 This week’s data dump from Korea suggests the economy weakened at the start of Q3, increasing the chances that the BoK will cut interest rates soon. Figures published yesterday showed that industrial production in July fell by 2.0% in …
1st September 2023
No relief in sight for manufacturing in Asia Manufacturing PMIs across most of Emerging Asia stood well inside contractionary territory in August. Weak foreign goods demand, elevated interest rates at home and bloated inventory levels suggest …
GDP growth has slowed sharply across most of Emerging Asia since the middle of last year and looks set to remain weak over the coming quarters, as tight monetary policy at home and subdued activity abroad weigh on demand. We anticipate below-trend and …
30th August 2023
Bloated inventories set to weigh on GDP Recent data from Taiwan have been mixed, with exports showing signs of life but consumer demand softening. We think the economy will weaken in the near-term as any further support from export demand is likely to be …
25th August 2023
Equities in Emerging Asia outside China have largely outperformed their peers in other Emerging Markets (EMs) since the pandemic started. We think that they will hold up better during the global stock market decline that we expect, and that they will also …
24th August 2023
Bank Indonesia (BI) today left its main policy rate unchanged (5.75%) but with inflation set to remain well within target and the economy weak, we expect BI to cut interest rates before the end of 2023. Today’s decision came as no surprise and was …
The central bank of Sri Lanka (CBSL) decided to keep monetary policy unchanged today, contrary to the expectations of most analysts (including ourselves), after having slashed rates by a cumulative 450bps at its past two meetings. In the near-term the …
The decision today by the Bank of Korea to leave the policy rate unchanged (at 3.5%) for a fifth consecutive meeting came as no surprise. However, comments by the central bank governor at the press conference contained the first signs of a looming dovish …
On hold again but rate cuts likely in the coming months The decision today by the Bank of Korea to leave the policy rate unchanged (at 3.5%) for a fifth consecutive meeting came as no surprise. The central bank is due to hold a press conference and …
