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 - Growth Downtrend Remains Intact - NOV 2014

Australasia & South Pacific October 2014 / Australia / Economy

BMI View: We are revising up our real GDP growth forecast for 2014 to 2.8% from 2.3% previously, given the stronger-than-expected growth rate seen in H114. However, we remain below consensus, and expect growth to slow to 2.3% in 2015 as the strong construction picture struggles to counteract the weakness in external demand.

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Economic Analysis - KRW/JPY: Appreciation To Continue - NOV 2014

China & North East Asia October 2014 / South Korea / Economy

We believe that the appreciation of the Korean won against the Japanese yen is likely to continue given the size of Korea's current account surplus and our expectations for yen weakness. However, Korea's central bank is likely to intervene to stem the rapid appreciation of the won against the yen due to domestic pressures.

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Political Risk Analysis - Government To Deal With Military To End Protests - OCT 2014

South Asia September 2014 / Pakistan / Political Risk

BMI View: Pakistan's Prime Minister Nawaz Sharif will withstand calls for his resignation by Pakistan Tehreek-e-Insaf (PTI) leader Imran Khan and cleric Tahir-ul-Qadri. However, the protests have weakened his authority, and an end to the demonstrations is likely to come as part of a deal with the powerful military elite to relinquish Sharif's control of foreign affairs, which will undermine relations with India and put Pakistan's fiscal reform progress in jeopardy.

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Risk Summary - Risk Summary - Myanmar - NOV 2014

South East Asia Vol 1 October 2014 / Myanmar / Economy

Myanmar's general election in November 2010 resulted in a landslide victory for the junta-backed Union Solidarity and Development Party (USDP). Inconsistent policies previously adopted by the former ruling State Peace and Development Council (SPDC) created uncertainties in the government's policy direction. Given that the USDP is likely to be heavily influenced by the old politburo, we believe uncertainties in policy direction will continue. This is reflected by a weak score of 40.0 for the 'policy continuity' sub-component of our risk ratings, keeping the overall short-term political risk rating for Myanmar at 56.9. Over the longer term, we see ongoing insurgencies against the government and growing discontent among the public as a threat to Myanmar's political outlook, although the government's recent push for reform may progressively reduce these risks should it continue.

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Economic Analysis - BNM Holds Rates For Now - NOV 2014

South East Asia Vol 2 October 2014 / Malaysia / Economy

In line with our expectations, Bank Negara Malaysia (BNM) held its Overnight Policy Rate (OPR) at 3.25% during its monetary policy meeting on September 18. We forecast interest rates to remain on hold for the rest of 2014 and through 2015 as BNM focuses on maintaining growth as exports have slowed and inflation should remain manageable.

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