Asia Monitor

Comprehensive country-by-country macroeconomic analysis, risk appraisals, latest market data and forecasts for Asia

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Key stories from this month's issue...

Political Risk Analysis - General Elections To Dominate Political Landscape In 2018 - MAR 2018

Australasia & South Pacific February 2018 / Fiji / Political Risk

Fiji is set to hold general elections in 2018, marking the second time the island-nation has held polls since its return to democracy in 2014. We thus expect the political landscape to be dominated by the run up to the polls and believe that while the ruling FijiFirst party is well-positioned to win, the labour strikes could weaken its position in favour of the opposition. We are thus downgrading our short-term political risk score to 50.8 from 51.5 previously, to reflect the increase in uncertainty.

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Economic Analysis - CBC To Hike Rates By 12.5bps In 2018 - MAR 2018

China & North East Asia February 2018 / Taiwan / Economy

In line with expectations, the CBC maintained its discount rate at 1.375% during its monetary policy meeting on December 21. With growth likely to be resilient and inflation set to embark on a gradual uptrend, we maintain our forecast for the CBC to hike rates once by 12.5bps to 1.50% in 2018 as it seeks to ensure that the real interest rate differential between Taiwan and the US remain in favour of the former while continuing to support growth.

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Political Risk Analysis - Legislative Elections To Dominate Political Landscape In 2018 - MAR 2018

South Asia February 2018 / Bhutan / Political Risk

Bhutan's political landscape will likely be dominated by the run up to the 2018 legislative elections and we believe that the elections are likely to be more closely contested than the previous polls. However, pre-election rhetoric is likely to be limited out of respect for the king and various parties are likely to focus on key issues such as development and sovereignty. We have downgraded our short-term political risk score to 60.4 from 61.0 previously to reflect the slight increase in political uncertainty.

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Political Risk Analysis - Corruption Scandal Poses A Risk To Military's Popularity As Elections Approach - MAR 2018

South East Asia Vol 1 February 2018 / Thailand / Political Risk

The corruption scandal involving the Thai deputy prime minister poses a threat to the military government's popularity as elections, now scheduled for early 2019, approach. A potential divide between the military and the yellow shirts could provide an opportunity for Thaksinite forces to step up, and we have revised down out short-term political risk index score to reflect this. Nonetheless, we maintain that provisions in the constitution will ensure that the military maintains a tight grip on power.

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Currency Forecast - PHP: Neutral Near-Term, Outperformance In Total Return - MAR 2018

South East Asia Vol 2 February 2018 / Philippines / Finance

Following PHP's strong showing in Q417, we expect the currency to trade sideways in the near-term as expectations of BSP's rate hikes are likely to be offset by a continuous deterioration in the terms of trade and a likely rise in market expectations regarding US Fed rate hikes. Over the long-term, we expect the peso to outperform the US dollar in total return terms given the superior economic growth outlook.

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