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 - No Rate Cuts On The Horizon - DEC 2017

Australasia & South Pacific October 2017 / Papua New Guinea / Economy

The BPNG kept its monetary policy on hold in its September bi-annual statement, and while it sounded relatively dovish, we expect the central bank to remain on hold through 2018. Persistent fiscal deficits, higher inflation, and a recharged fed hiking cycle will likely leave little policy room for BPNG to ease any further to support growth.

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Economic Analysis - Upgrading Growth As External Outlook Improves - DEC 2017

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

South Korea's economy grew by 2.7% y-o-y in Q217, bringing H117 growth to 2.8% y-o-y, and we are upgrading our 2017 real GDP forecast to 2.8% from 2.6% previously (the same rate as 2016). Strong demand from the electronics sector is likely to be the main driver of both export growth as well as provide continued support for fixed asset investment in the semiconductor sector. Domestically, while the government's supplementary budget will provide a limited measure of support, it will be insufficient to overcome the drag from persistently high youth unemployment, which will undermine efforts to boost domestic consumption.

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Economic Analysis - RBI To Maintain Repo Rate At 6.00% For Rest Of FY2017/18 - NOV 2017

South Asia September 2017 / India / Economy

We maintain our average FY2017/18 (April-March) consumer price inflation (CPI) forecast at 3.5%, and we expect the Reserve Bank of India (RBI) to hold its benchmark repo rate at 6.00% for the rest of FY2017/18 due to rising inflation and expectations of an economic recovery in the second half of the fiscal year.

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Economic Analysis - Export Manufacturing To Lead Growth Outperformance - DEC 2017

South East Asia Vol 1 October 2017 / Vietnam / Economy

Following Vietnam's spectacular real GDP showing of 7.5% y-o-y in Q317, which brings cumulative growth to 6.4% y-o-y, we have upgraded our forecast to 6.5% for 2017, and 6.7% for 2018. We expect the export manufacturing and services sector to continue outperforming, but note that growth is unlikely to be sustained at the 7+% level over the coming quarters.

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Economic Analysis - Stable Growth-Inflation Dynamics To Prompt MAS Hold - DEC 2017

South East Asia Vol 2 October 2017 / Singapore / Economy

The MAS's decision to maintain its existing policy stance during its monetary policy meeting on October 13 was in line with our expectations and we forecast the central bank to retain its neutral stance over the coming months amid a stable growth-inflation outlook. Headline inflation is likely to remain muted and we have downgraded our 2017 and 2018 average inflation forecasts to 0.8% and 1.3%, respectively, from 1.0% and 2.3% previously.

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