Growth is improving, but at a very gradual pace. Singapore‟s GDP grew 2.0% y/y in H1-2013, following three consecutive quarters of positive growth at a q/q seasonally adjusted annualised rate (SAAR). The H1 data included two strong positive signs fo...
We maintain our 2013 growth forecast of 4.7% for Malaysia. H1 growth was 4.2% y/y, and we expect a slightly better performance in H2, at 5.2% y/y. Domestic drivers have sustained growth in the past few quarters. As a high base affects domestic y/y g...
• We see growth improving across the region, despite recent financial-market distress. Fretting over the growth outlook because of portfolio outflows is missing the point, in our view. We think more optimism is in order, as simultaneous growth in ma...
Economic activity in Vietnam continues to recover gradually, although the pace is slow by historical standards. GDP grew 5.14% in the first nine months of 2013. We estimate that Q3 growth was 5.54% y/y, faster than the 4.9% pace in H1-2013, although...
• Although Indonesia’s economic fundamentals are still strong, its external exposures are rising
• Balance-of-payments deterioration needs to be addressed with structural rather than ad-hoc measures
• External debt has risen in recent years, but ...
Mekong region is attracting investor interest as a low-cost base, as reflected in our client survey
• The business environment varies widely across the region and can be challenging
• Infrastructure tends to be strong only in designated industria...
• Worries over the impact of eventual US tightening and policy actions in China may have affected markets, but Asia’s underlying macro resilience remains intact. Domestic demand indicators have been holding up. We have downgraded our 2013 growth for...
• The global economy is recovering, despite the weakness in the West. It will be difficult for the US to achieve more than 2% GDP growth this year; fiscal tightening and policy uncertainty will cast shadows on the turnaround in the housing and energ...
• The budget for FY13 remains focused on addressing economic restructuring and income inequality
• The government introduce measures to help companies weather the current restructuring phase
• Income redistribution, via measures such as more progr...
The Population White Paper projects slowing population growth
• Slowing population and workforce growth makes raising productivity imperative
• The economic structure may become more service-based to match population projections
We continued our annual briefings in Singapore and Manila, following KL, Bangkok and Jakarta
• Optimism in the Philippines is much stronger than we had expected; Singapore’s sentiment is improving
• Almost all our clients see the PHP stronger or ...
• We maintain our bullish outlook for ASEAN economic growth in 2013
• Despite world-beating growth rates in recent decades, the region still has plenty of room to grow
• We project that ASEAN’s per-capita GDP could almost triple with successful ur...
Top 3 data/events
• Singapore/Thailand – Target on short SGD-THB extended
• Taiwan – Strong IP likely boosted Q4-2012 GDP
• UK – PM Cameron to seek ‘fresh consent’ on EU relationship
• Market focus
• Asian inflation remains tolerable for now
• Sentiment in Malaysia is more bullish for 2013 vs. 2012; optimism has declined in Indonesia
• Domestic and regional issues are back in focus, especially wage costs and political uncertainty
• Clients are more optimistic on the THB in 2013 than i...
• The government sticks to fiscal consolidation, lowers its 2013 budget deficit target to 4% of GDP
• Revenue and expenditure growth assumptions are flat, with cuts to developmental social expenditure
• Gross borrowing requirement is estimated at ...
• Asia is still partly insulated from the West – in much of the region, domestic demand has grown more strongly than exports in 2012. However, Asia has been slowing in recent months. We expect growth to turn up in H1-2013, and we forecast better gro...
Myanmar is back on the world’s radar as its leaders embark on liberalisation and a pro-growth agenda
• Our recent visit showed that the public and private sector are pro-growth and pro-business
• Myanmar has favourable initial endowments, but muc...
Philippines can achieve investment grade by 2014 via fiscal reforms and higher investment
• Strong tax productivity and lower debt-to-GDP ratio are required
• Sovereign credit spread is already trading consistently with investment-grade levels
Top 3 data/events
• China – Moderating GDP and IP growth should further highlight China’s soft landing
• South Korea – The BoK should keep the base rate on hold for a 10th month
• US – Trade is unlikely to support growth in Q1
• Despite market optimism since the start of 2012, the economies of the West remain fragile due to poor fundamentals, a lack of policy options and fickle confidence. Structural trends in emerging markets will be a positive offset. Meanwhile, domesti...
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This report provides an economic outlook for more than 60 economies worldwide and investment implications for commodities, credit, equities, FX and interest rates markets in 2014. We expect a better 2014, with world economic growth picking up and inflation staying benign. Global growth should increase to 3.5% in 2014 from 2.7% in 2013, helped by improvements in economic activity in the US and Europe. A pick-up in growth in the West is good news for the rest of the world, and we expect emerging economies’ growth to outpace G7 growth by almost 4 percentage points.
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