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Falling fertility in Korea Recently released figures show the fertility rate (the number of babies expected to be born per woman during her lifetime) in Korea fell to a new all-time low of just 0.7 in the third quarter of the year. This is the lowest …
8th December 2023
Overview – Economic growth in most of Emerging Asia is likely to slow in the near term as weak global demand and high interest rates weigh on prospects. With growth set to struggle and inflation likely to ease, interest rate cuts are likely to come on to …
7th December 2023
Korea makes a weak start to Q4 This week’s data dump from Korea suggests the economy weakened at the start of Q4, supporting our view that the tightening cycle is over and that interest rate cuts could come onto the agenda soon. Figures published …
1st December 2023
The November PMIs for Emerging Asia generally nudged up a touch but remained weak overall. The outlook for manufacturing sector in the region remains bleak in the near term as elevated inventory levels, high interest rates and subdued foreign demand weigh …
In this Global Economics Update , we describe eight of the biggest risks to our economic forecasts for 2024. The unusual nature of this cycle and uncertainties surrounding the transmission of monetary policy mean that the biggest risks relate to central …
30th November 2023
The Bank of Korea (BoK) today left its policy rate unchanged (at 3.5%) for a seventh consecutive meeting, and hinted that interest rates would remain elevated as it continues to clamp down on inflation. While we think interest rates will be left on hold …
On hold again, rate cuts in Q2 next year The Bank of Korea (BoK) today left interest rates unchanged (at 3.5%) for a seventh consecutive meeting. The decision came as no surprise and was correctly predicted by all 36 economists polled by Reuters, …
The Bank of Thailand (BoT) today left interest rates unchanged (at 2.50%) and hinted that rates are likely to be left on hold for the foreseeable future. With inflation below target and the recovery likely to disappoint, we expect interest rates to remain …
29th November 2023
Emerging Asia Chart Pack (Nov. 2023) …
28th November 2023
Strong Q3 growth Most countries in Emerging Asia have now published GDP figures for the third quarter. Growth slowed in China, was unchanged in Korea, but rebounded strongly everywhere else. (See Chart 1.) To view our various responses click here . …
24th November 2023
BI on hold, end of the tightening cycle Bank Indonesia today left interest rates unchanged and the comments from the press conference suggest this marks the end of the tightening cycle. With growth likely to struggle and inflation set to remain weak, …
23rd November 2023
One year into his premiership, Anwar Ibrahim has made very limited progress on his key reform objectives. Given his weak position in parliament, we don’t anticipate this will change anytime soon, and we remain downbeat on the country’s medium-term …
22nd November 2023
Economic growth in Singapore rebounded strongly in the third quarter of the year, but we don’t expect this strength to last. A combination of weaker global demand and high interest rates will cause growth to slow over the next couple of quarters. The …
Economic growth in Thailand picked up in the third quarter of the year and we expect the economy to record steady, if unspectacular growth over the coming quarters, helped by looser fiscal policy and a further recovery in the tourism sector. GDP growth …
20th November 2023
Back-to-back rate hikes unlikely Bank Indonesia surprised financial markets (and us) by hiking interest rates in October. But we don’t expect it to follow through with another hike at its scheduled meeting on Thursday. The main reason BI hiked last …
17th November 2023
GDP figures for Malaysia published today confirmed that the economy rebounded strongly in the third quarter of the year. However, with interest rates set to remain elevated and exports likely to struggle, we doubt this strength will last. Today’s figures …
During the past decade, the global economy has transitioned out of an era in which globalisation was the key driver of economic and financial relationships into one shaped by geopolitics. Previously, most governments had believed that closer economic …
16th November 2023
Rates on hold, tightening cycle at an end The central bank in the Philippines (BSP) today left its main policy rate unchanged (at 6.50%), but warned it remained ready to raise interest rates further if necessary. However, with inflation likely to ease …
BSP on a knife edge The Philippines central bank (BSP) hiked interest rates at an unscheduled monetary policy meeting on 26 th October, and at the time warned the upcoming data on GDP and inflation (both published this week) would be crucial in deciding …
10th November 2023
An opposition win in Taiwan ’ s upcoming presidential election could lead to a complete or partial reversal of the economic sanctions that China has imposed on Taiwan ’ s economy during Tsai Ing-wen ’ s presidency. The restrictions on tourism are the …
9th November 2023
GDP rebounded strongly in the third quarter of the year but we don’t expect this strength to last as high interest rates and weaker global growth lead to renewed economic weakness in the near term. According to the data published today, GDP rose by 3.3% …
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
