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Weak start to the year in Korea Recent economic data from Korea paint a depressing picture. GDP figures published late last month showed the economy contracted by 0.4% q/q at the end of 2022 – the third worst quarterly performance since the Asian …
3rd February 2023
Manufacturing still downbeat and outlook remains bleak Manufacturing PMIs edged up slightly in January but remained subdued overall. We continue to expect weak global demand and elevated interest rates to drag on manufacturing activity in the coming …
1st February 2023
Asian currencies have continued to rebound against the US dollar over the past month, and most are now up by around 5-15% against the greenback since early November. Optimism around China’s reopening and expectations for a Fed policy pivot have been the …
30th January 2023
More encouraging than it looks This week’s headlines suggest that Pakistan is in the midst of a full-blown crisis. On Monday the central bank hiked its main policy rate by a further 100bps. Two days later the cap limiting daily moves in the rupee was …
27th January 2023
We held a Drop-In today to discuss the big economic and financial market development across Emerging Asia. (You can see an on-demand recording here .) This Update answers several of the questions that we received, some of which we couldn’t answer during …
26th January 2023
Inflation looks to have peaked across Emerging Asia, and is likely to fall back more sharply than most analysts expect over the coming year as fuel price inflation drops, the disruption from the pandemic eases and economic growth slows. With inflation …
Growth slowed in Q4 and we expect the economy to weaken further over the coming quarters against a backdrop of weak global demand, high interest rates and elevated inflation. According to the advanced estimate published today, GDP rose by 2.4% q/q in Q4 …
Growth set to weaken in 2023 Growth slowed in Q4, and we expect the economy to weaken further over the coming quarters against a backdrop of weak global demand, high interest rates and elevated inflation. According to the advanced estimate published …
Economic output fell in the final quarter of 2022, and we think the economy will continue to struggle over the coming year as high interest rates and weak overseas demand weigh on prospects. Our 2023 growth forecasts are well below the consensus. …
25th January 2023
Difficult year ahead Economic output fell in the final quarter of 2022, and we think the economy will continue to struggle over the coming year as high interest rates and weak overseas demand weigh on prospects. Our 2023 growth forecasts are well below …
The Bank of Thailand hiked interest rates today by a further 25bps (to 1.50%), and hinted that more rate hikes were likely in the near term amid worries about rising underlying price pressures. We expect one more 25bps increase this year before the …
More tightening still to come The Bank of Thailand hiked interest rates today by a further 25bps (to 1.50%), and hinted that the tightening cycle still has further to run. The decision was correctly predicted by 21 out of the 23 economists polled by …
Sri Lanka’s central bank (CBSL) kept interest rates unchanged today, and we expect it to leave rates on hold for the rest of the year as it aims to strike a fine balance between supporting a struggling economy and clamping down on high inflation. The …
Rates set to stay on hold in 2023 Sri Lanka’s central bank (CBSL) kept interest rates unchanged today and we expect it to leave rates on hold for the rest of the year as it aims to strike a fine balance between supporting a struggling economy and clamping …
Pakistan’s central bank (SBP) raised its policy rate today by a further 100bps (to 17.0%), and we expect more tightening over the coming months amid concerns about high inflation and the worsening external position. Interest rates have now been raised …
23rd January 2023
Further tightening on the cards Pakistan’s central bank (SBP) raised its policy rate today by a further 100bps (to 17.0%), and we expect more tightening over the coming months amid concerns about high inflation and the worsening external position. …
Rebounding won An easing of inflation pressures in the US along with China’s reopening have provided a boost to Asian currencies over the past couple of months. The biggest rebound has been in the Korean won, which has now appreciated by 17% against the …
20th January 2023
Bank Indonesia (BI) today raised interest rates by a further 25bps (to 5.75%) but also appeared to signal there would be no further rate increases this year. We are changing our forecast in response, and now think the tightening cycle has come to an …
19th January 2023
Malaysia’s central bank (BNM) unexpectedly left its main policy rate unchanged today (at 2.75%), but appeared to leave open the possibility of further rate hikes later in the year. However, with growth set to slow and inflationary pressures easing, we …
Bank Indonesia tightening cycle at an end Bank Indonesia (BI) today raised interest rates by a further 25bps (to 5.75%) but also appeared to signal there would be no further rate increases this year. We are changing our forecast in response, and now …
Rates on hold, end of the tightening cycle Malaysia’s central bank (BNM) unexpectedly left its main policy rate unchanged today (at 2.75%), but appeared to leave open the possibility of further rate hikes later in the year. However, with growth set to …
Taiwan’s economy unexpectedly contracted in Q4, driven by a sharp fall in exports. We expect the economy to remain weak over the coming quarters as exports struggle amid a global recession and higher interest rates weigh on domestic demand. According to …
18th January 2023
Economy set to remain weak Taiwan’s economy unexpectedly contracted in Q4, driven by a sharp fall in exports. We expect the economy to remain weak over the coming quarters as exports struggle amid a global recession and higher interest rates weigh on …
Implications of a stronger recovery in China COVID-19 has spread through China much faster than we had expected, with one province reporting that 89% of the population has been infected with the virus. This is paving the way to a much earlier economic …
13th January 2023
The Bank of Korea today raised interest rates by a further 25bps (to 3.50%) and relatively dovish comments by Governor Rhee support our view that the tightening cycle is now over. With growth set to struggle and inflation likely to fall back further, we …
Final rate hike of the cycle The Bank of Korea today raised interest rates by a further 25bps (to 3.50%), but with price pressures easing and economic growth slowing sharply, we think this will be the last hike of the cycle. Today’s decision came as …
Forecast change on China border reopening Tourism across Asia has rebounded strongly in recent months, with arrivals in most places now at around 45% of pre-crisis levels. (See Chart 1.) Chart 1: Tourist Arrivals (% of 2019 level) Sources: Refinitiv, …
6th January 2023
China’s abandonment of its zero-COVID policy could lead to supply chain disruption in other EMs, particularly other parts of Asia and Mexico, though we’re not too concerned yet. And outbound Chinese tourism is likely to soar, to the benefit of Hong Kong …
4th January 2023
Further weakness ahead Manufacturing PMIs across the region rose slightly in December but remained weak overall. We continue to expect weaker global demand, high inflation and interest rates to drag on manufacturing ahead. December PMIs have been released …
3rd January 2023
Growth slowed sharply in the first two months of Q4 and we expect a further slowdown over the coming months as high inflation, multi-decade high interest rates and weaker global demand weigh on prospects. The flash estimate for Q4 GDP, largely computed …
The economy is likely to teeter on the brink of recession in 2023 Economic growth slowed sharply during the first two months of the fourth quarter and we think a further slowdown is likely over the coming quarters. The flash estimate for Q4 GDP, largely …
Recent trade data from Emerging Asia have been downbeat and, with the global economy heading for recession, worse is still to come. China, Taiwan, Korea and Singapore all reported big falls in exports in November. For the region as a whole, we estimate …
23rd December 2022
Bank Indonesia (BI) today raised interest rates for a fifth consecutive meeting, but slowed the pace of tightening with a 25bp hike (to 5.50%). With inflation still well above target, the central bank has more work to do. But provided the currency …
22nd December 2022
Bank Indonesia slows pace of tightening, but further hikes are likely Bank Indonesia (BI) today raised interest rates for a fifth consecutive meeting but slowed the pace of tightening by raising interest rates by just 25bps (to 5.50%) from 50bp at its …
The past few weeks have brought mostly good news on the inflation front, with the headline rate dropping back in most countries in November. (See Chart 4.) Less encouragingly, however, core inflation has continued to rise and is now at multi-year highs …
20th December 2022
Tourism boost and risk of factory disruption Chinese authorities appear to have given up on efforts to contain the spread of COVID-19 much earlier than we had previously anticipated. (See here .) We suspect that China’s economy will experience a …
16th December 2022
This is part of a series of reports outlining our key macro and market calls for 2023. Click here to view the full series. Our latest EM Outlook can be found here . EMs will experience one of the broadest slowdowns in GDP growth in 2023 since the 1990s. …
15th December 2022
Taiwan’s central bank (CBC) today raised its main policy rate by 12.5bps (to 1.75%) but with inflation easing and growth set to struggle, we expect this hike to have marked an end to the tightening cycle. Today’s decision was in line with expectations. Of …
The central bank in the Philippines (BSP) today raised its main policy rate by 50bps (to 5.50%), but with Governor Felipe Medalla sounding more dovish than expected on inflation, we think the tightening cycle will be over soon. The decision was exactly in …
End of the tightening cycle Taiwan’s central bank (CBC) today raised its main policy rate by 12.5bps (to 1.75%) but with inflation easing and growth set to struggle we expect this hike to have marked an end to the tightening cycle. Today’s decision was in …
Tightening cycle nearing an end The central bank in the Philippines (BSP) today raised its main policy rate by a further 50bps (to 5.50%), but with Governor Felipe Medalla sounding more dovish than expected on inflation, we think the tightening cycle will …
Click here to read the full report. Overview – Economic growth will slow sharply in most of the region in 2023 as higher interest rates and weaker exports drag on demand. Our GDP growth forecasts are below consensus in most countries. With inflationary …
13th December 2022
Inflation still rising in the Philippines The past week has brought mostly good news on the inflation front. Of the nine countries in the region to have reported November inflation figures, the y/y rate dropped or was stable in eight of them. (See Chart …
9th December 2022
