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 - IMF Loan Request Signals Fresh Nadir - MAY 2016

Australasia & South Pacific April 2016 / Papua New Guinea / Economy

The Bank of Papua New Guinea (BPNG)'s request for a temporary PGK1bn lending facility from the IMF marks a fresh nadir in the reversal of the economy's fortunes, and a weaker kina will likely be necessary in order to prevent the need for further assistance. As such, we retain our end-2016 forecast on the currency at PGK3.300/USD, versus a spot rate of approximately PGK3.080/USD.

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Market Strategy - CNY: Benefiting From Broad USD Weakness, But Set To Underperform - MAY 2016

China & North East Asia April 2016 / China / Finance

The Chinese yuan has stabilised amid a return of global risk appetite, and against a backdrop of US dollar weakness, we have revised our end-2016 forecast on the currency up to CNY6.8000/USD, from CNY7.1000/USD previously. However, we reiterate that the yuan remains extremely strong in real effective exchange rate terms, and retain our expectations for the currency to weaken from current levels and underperform its regional peers.

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Economic Analysis - Fiscal Expenditure To Accelerate Over Coming Months - MAY 2016

South Asia April 2016 / Bangladesh / Economy

Bangladesh's small budget surplus of 0.1% of GDP between July and October 2015 will likely flip into a deficit over the coming months as the government accelerates its capital and development expenditure to support growth in the economy. As such, we maintain our forecast for Bangladesh's budget balance as a share of GDP to come in at -4.3% in FY2015/16 (July to June).

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Political Risk Analysis - Suu Kyi's Failed Presidential Bid Reveals Underlying Tensions - MAY 2016

South East Asia Vol 1 April 2016 / Myanmar / Political Risk

The NLD's selection of Htin Kyaw as its nominee for president has put an end to speculation regarding party leader Aung San Suu Kyi's candidacy. The fact that the party has settled for someone other than Suu Kyi suggests a failure in negotiations with the Tatmadaw, and likely reveals growing tensions between the two sides after a brief honeymoon period following last year's elections. Htin Kyaw will essentially play the role of proxy president for Suu Kyi, which will engender a level of opacity around political dealings with the government. Meanwhile, the obvious rift between the NLD and the Tatmadaw remains a prescient threat to Myanmar's business environment.

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Economic Analysis - 2016 Budget Deepens Economic Transformation Programme - MAY 2016

South East Asia Vol 2 April 2016 / Singapore / Economy

Singapore's FY2016/17 budget is largely focused on providing near-term support for SMEs, as well as deepening the government's efforts to restructure the economy away from cheap labour and towards high value-added industries and automation. Versus an estimated deficit of SGD4.9bn in FY2015/16 (1.2% of GDP), we forecast a surplus equivalent to 1.0% of GDP for FY2016/17.

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