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...

Economic Analysis - RBF To Remain Accommodative To Support Fiscal Initiatives - SEPT 2017

Australasia & South Pacific July 2017 / Fiji / Economy

The RBF held its Overnight Policy Rate at 0.5% during its June monetary policy meeting amid a stable economic outlook. With inflation likely to remain manageable and the central bank likely to seek to support the government's expansionary budget, it is unlikely that the RBF will hike rates in 2017. As such, we have pared back our forecasts and now expect the central bank to remain on hold through 2017 and 2018 as it seeks to support the government's fiscal initiatives amid a stable inflation outlook.

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Economic Analysis - Supplementary Budget Beginning Of Shift Towards Increased Spending - SEPT 2017

China & North East Asia July 2017 / South Korea / Economy

While we do not expect South Korea's proposed supplementary budget to have an impact on the government's fiscal position, the speed by which the government has drawn up the proposal indicates the importance of job creation and marks the beginning of a shift towards one of increased spending. We maintain our expectations for the country's 2017 operating fiscal deficit to come in at 1.7% of GDP, and do not expect the budget to pass parliament in its existing form due to fierce opposition from the various parties.

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Political Risk Analysis - Rising Religious Violence Poses Downside Risk To Growth Outlook - SEPT 2017

South Asia July 2017 / Sri Lanka / Political Risk

There has been an increase in occurrence of religious violence in Sri Lanka, and we believe that the government's inaction could further embolden perpetrators and aggravate religious tensions in the country. Should the situation worsen over the coming months, we would look to downgrade the country's short-term political risk score (which currently stands at a mediocre 70.0) and potentially its economic growth outlook.

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Political Risk Analysis - Yingluck Verdict The Next Test For Political Stability - SEPT 2017

South East Asia Vol 1 July 2017 / Thailand / Political Risk

Former Prime Minister Yingluck Shinawatra's criminal negligence case, relating to her role in the costly rice subsidy scheme in 2014, will draw to a close on July 21. A guilty verdict could lead to increased protest activity among her supporters, posing the latest challenge to political stability. That said, the military establishment's tight grip on power is likely to ensure policy continuity, and Thailand's short-term political risk score remains above the regional average for this reason.

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Currency Forecast - MYR: Maintaining Our Bullish View - SEPT 2017

South East Asia Vol 2 July 2017 / Malaysia / Finance

We have upgraded our 2017 and 2018 end-year forecasts to MYR4.200/USD and MYR4.100/USD respectively to reflect continued MYR strength. We maintain our positive outlook on the currency over the near and medium term as the unit remains supported by a positive technical picture, an undervalued real effective exchange rate, and an improving fiscal outlook.

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