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Note: We’re holding a special 20-minute online briefing all about EM debt risks this Thursday at 10:00 EDT/15:00 BST . Register now . Malaysia’s central bank (BNM) unexpectedly raised its main policy rate (OPR) today by 25bps (to 3.0%), citing the …
3rd May 2023
Surprise hike, but no more tightening in 2023 Malaysia’s central bank (BNM) unexpectedly raised its main policy rate today by 25bps (to 3.0%), citing the resilient economy as grounds to “further normalise the degree of monetary accommodation”. However, …
Manufacturing sector remains under pressure A simple average of manufacturing PMIs in Emerging Asia rose slightly in April but this was almost entirely driven by a large jump in Thailand’s headline index to a record high. Weak global demand and high …
2nd May 2023
Auto rebound to prove short lived Automotive production across Asia, which was badly hit during the pandemic by a shortage of semiconductor components, is now rebounding rapidly as this constraint unwinds. The surprise q/q expansion in Q1 Korean GDP …
28th April 2023
Taiwan’s GDP contracted sharply in the first quarter of the year, as a slump in exports put the economy into a technical recession. We think the economy will struggle over the coming quarters as weak external demand and a fading reopening boost drag on …
Economy in recession, weak recovery ahead Taiwan’s GDP contracted sharply in the first quarter of the year, as a slump in exports put the economy into a technical recession. We think the economy will struggle over the coming quarters as weak external …
Vietnam became the first country in the region to start loosening policy when it lowered its refinancing rate at the end of March. We don’t think it will be long before other central banks in Asia start to cut rates, with the Bank of Korea set to be next, …
26th April 2023
GDP in Korea rose slightly during the first quarter of the year but we think the economy faces a difficult year ahead as high interest rates and weak external demand weigh on output. According to the advance estimate for Q1 GDP published today, the …
25th April 2023
High interest rates and weak external demand to weigh on prospects GDP in Korea rose slightly during the first quarter of the year but we think the economy faces a difficult year ahead as high interest rates and weak external demand weigh on output. Our …
Goods exports to China have struggled National accounts data published this week show that China’s economy expanded by a faster-than-expected 2.2% q/q in the first quarter – taking output 6.8% higher than during the recent trough in Q2 2022. See our China …
21st April 2023
Bank Indonesia (BI) today left interest rates unchanged (at 5.75%), and appeared to signal that further rate increases this year were unlikely. With inflation falling and growth easing, we expect interest rates to be left on hold for the remainder of the …
18th April 2023
On hold for the rest of the year Bank Indonesia (BI) kept its main policy rate unchanged today (at 5.75%), and appeared to signal that further rate increases this year were unlikely. With inflation falling and growth easing, we expect interest rates to be …
Difficult balancing act for the Philippines The US and the Philippines this week began their largest-ever joint military exercises, with 17,000 troops taking part. The exercises follow an agreement in February that provided the US with four more …
14th April 2023
The Monetary Authority of Singapore (MAS) kept policy on hold today and with the economy set to struggle and inflation likely to fall sharply over the coming quarters we expect today’s decision to have marked an end to the tightening cycle. The MAS …
MAS keeps policy unchanged while GDP contracts The Monetary Authority of Singapore (MAS) kept monetary policy on hold today and with the economy set to struggle and inflation likely to fall sharply over the coming quarters we expect today’s decision to …
The Bank of Korea left interest rates unchanged (at 3.5%) for a second consecutive meeting today, and attempted to push back against expectations of a rate cut this year. But with the economy struggling badly and inflation continuing to ease, we are …
11th April 2023
On hold again, first cut likely in August The Bank of Korea left its policy rate unchanged (3.5%) for a second consecutive meeting today, and we don’t think it will be long before rate cuts come onto the agenda. With the economy struggling badly and …
Weak economy and elevated inflation in Singapore Having been one of the star performers during the pandemic, Singapore’s economy has weakened considerably in recent months. GDP grew by just 0.1% q/q in the final quarter of last year, and recent data …
6th April 2023
Sri Lanka’s central bank (CBSL) left interest rates unchanged today and we expect rates to stay on hold for the rest of the year as policymakers look to strike a balance between clamping down on inflation, maintaining good relations with the IMF and …
4th April 2023
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . Pakistan’s central bank (SBP) today raised its policy rate by a further 100bps (to 21.0%), but the tone of the statement was less hawkish than after …
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . Vietnam’s central bank lowered its benchmark refinancing rate by 50bp, on Friday evening, citing the need to support the economy. The rate cut was in …
3rd April 2023
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . Production likely to remain weak ahead Manufacturing PMIs in Emerging Asia dropped back in March, driven by a fall in the new export orders and …
Note: Join our 6th April online briefing all about the risks to EMs from banking turmoil. Register now . Korea’s economic outlook remains bleak The latest activity data from Korea were a mixed bag but the economy is likely to feature among the worst …
31st March 2023
Note: Join our 6 th April online briefing all about the risks to EMs from banking turmoil. Register now . The turmoil in the global banking system over the past month has had a limited impact on Asia – currencies have held up well and outflows of capital …
30th March 2023
The Bank of Thailand (BoT) raised its main policy rate today by 25bps, to 1.75%. While most analysts expect at least one more hike we think a sharp drop in inflation will allow the central bank to hold fire and that this marks the end of the tightening …
29th March 2023
Further tightening unlikely The Bank of Thailand (BoT) raised its main policy rate today by 25bps, to 1.75%. While most analysts expect at least one more hike we think a sharp drop in inflation will allow the central bank to hold fire and that this marks …
Vietnam’s economy slowed sharply in the first quarter and we expect growth to remain weak this year due to the challenging external demand backdrop and the lagged impact of monetary policy tightening. Vietnam’s GDP data should be taken with a pinch of …
Economic activity to remain weak this year Economic growth in Vietnam slowed sharply in the first quarter of 2023 and we expect economic activity to remain weak this year given the challenging external demand backdrop and the lagged impact of monetary …
Recent turmoil in the banking sector may have been a US and European story, but there are potentially important angles for Emerging Market investors. Our latest EM Drop-In explored the economic spill-over risks from the recent panic and the …
28th March 2023
Indonesia reforms – boost to long-run prospects Long-term prospects for Indonesia’s economy received a boost this week when parliament passed a long-delayed series of reforms that should lift competitiveness. The Omnibus Law on Job Creation includes …
24th March 2023
Overview – High interest rates and weak export demand will weigh on the region’s economies this year, and we expect below-trend and below-consensus growth in most countries in 2023. The exceptions are China, which has rebounded strongly on the back of a …
In a surprise move, Taiwan’s central bank (CBC) today raised its main policy rate by 12.5bps (to 1.875%), but with the economy struggling badly and inflationary pressures set to ease further, we think this was the last hike of the tightening cycle. The …
23rd March 2023
The central bank of the Philippines (BSP) today slowed the pace of tightening as it raised its main policy rate by 25bps (to 6.25%), and hinted that the tightening cycle was now approaching an end. Although inflation has now started to fall, it remains …
Surprise hike, but cuts still likely in H2 In a surprise move, Taiwan’s central bank (CBC) today raised its main policy rate by 12.5bps (to 1.875%), but with the economy struggling badly and inflationary pressures set to ease further, we think this was …
More tightening still to come The central bank of the Philippines (BSP) today slowed the pace of tightening as it raised its main policy rate by 25bps (to 6.25%), and hinted that the tightening cycle was now approaching an end. Although inflation has now …
The deal announced yesterday between Sri Lanka and the IMF should eventually pave the way for a sustained economic recovery. However, the tough conditions being imposed as part of the agreement mean the country faces another difficult year ahead. …
21st March 2023
While the Credit Suisse rescue might draw a line under that particular institution’s problems, it is clear that confidence in the financial sector overall is still extremely fragile. So regardless of whether more financial institutions run into trouble, …
20th March 2023
Limited impact so far All of our coverage of the turmoil in the global banking system can be found on our dedicated webpage . There are also some webinars on the crisis you can listen to on demand. (See here .) For Emerging Asia, the impact has so …
17th March 2023
A key channel through which emerging markets could be affected by the strains in the global banking sector is if lending by foreign banks falls sharply. On this front, EMs’ vulnerabilities have eased since the Global Financial Crisis. But there are still …
16th March 2023
Bank Indonesia (BI) today left interest rates unchanged (at 5.75%), and signalled that with inflation falling back more quickly than expected, rates would be left on hold over the coming months. In the event that the rupiah comes under sustained …
No more hikes this year Bank Indonesia (BI) kept its main policy rate unchanged today (at 5.75%), and signalled that further rate increases this year were unlikely. The rupiah has held up relatively well over the past week despite the turmoil in global …
Economy likely to remain weak despite some encouraging signs GDP figures released today for Sri Lanka highlight the scale of the economic damage caused by last year’s political crisis and debt default. While there are some tentative signs that the worst …
15th March 2023
Vietnam’s central bank unexpectedly lowered interest rates late yesterday as it aims to support the struggling economy which has been hit hard by the downturn in global demand and problems in the property sector. We think the central bank will tread …
At the time of writing, financial markets appear to be stabilising after the turmoil caused by the collapse of SVB. And it doesn’t look like EMs have suffered large capital outflows or strains in their banking sectors. If this relatively benign scenario …
14th March 2023
Thailand forecast change The recent inflation data from Emerging Asia have made for encouraging reading, with headline inflation falling in seven out of the nine countries to have published February data. (See Chart 1.) Chart 1: Consumer Prices (%, …
10th March 2023
For most economies in Emerging Asia it will be local factors, not the actions of the US Fed, that determine the next moves by the region’s central banks. Given the poor outlook for economic growth in Asia, policymakers are unlikely to respond to a more …
9th March 2023
Malaysia’s central bank (BNM) left its policy rate unchanged today (at 2.75%) and with the economy likely to remain weak and inflation set to fall back further over the coming months, we expect rates to stay on hold for the rest of the year. Today’s …
Rates set to remain on hold in 2023 Malaysia’s central bank (BNM) left its main policy rate unchanged today (at 2.75%) and stated again that it would continue to take time to monitor the impact of past rate hikes before deciding if further tightening was …
Very weak Q4 figures The fourth quarter GDP figures published over the past few weeks made for grim reading. GDP contracted in around half of the countries covered by our Emerging Asia services. Only India, Indonesia and the Philippines recorded decent …
3rd March 2023
Pakistan’s central bank (SBP) raised its policy rate by 300bps (to 20.0%) today, and signalled monetary policy would remain tight as policymakers look to secure a loan deal with the IMF and tackle multi-decade high inflation. We expect a further 200bps …
2nd March 2023