No change in monetary policy in February
• Economic data shows signs of improvement, inflation is still benign
• CBSL is likely to remain on hold unless economic data shows significant weakness
• T-bond market response is muted; we remain Neut...
We expect a marginal improvement in growth in 2014 to 7.0% (from an expected 6.8% in 2013)
• The credit cycle may take some time to turn
• The CBSL is on hold for now – low private-credit growth/inflation could trigger a further rate cut
• The L...
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 majo...
Sri Lanka is set to consolidate its strong H1-2013 performance (average GDP growth of 6.4%) in H2. We maintain our full-year growth forecast of 6.5%, despite the central bank‟s more optimistic projection of 7.5% premised on the global recovery in H2...
To paraphrase Mark Twain, the reports of the death of EM bond markets have been greatly exaggerated. Increased global allocations to local EM bond markets have been not cyclical but primarily structural in nature, reflecting these markets’ rising ec...
• Stable FX reserves offset the impact of Moody’s sovereign outlook revision on Sri Lankan markets
• Steady growth and lower inflation underpin our constructive outlook on Sri Lanka
• Inflation is likely to pick up in Q4, but the absence of furthe...
• CBSL has lowered policy rates by 50bps each on growth concerns; likely to remain stable until Q1-2014
• IMF cautions that inflation is still a risk but its pace is not “unduly worrying”
• T-bond yields to remain range-bound on supply concerns; ...
Muted recovery, fiscal consolidation and C/A improvement are the common themes for South Asia
• Within this, the outlook for the BDT is most positive, while the PKR is expected to slide further
• Political uncertainty is a key risk for the region,...
• 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...
Demand and supply dynamics are favourable in South Korea, Malaysia, the Philippines and Taiwan
• Foreign demand to remain strong in 2013, particularly as RMFs shift focus back to Asia from CEMEA
• Buy 10Y (LB236A) THB bonds, as curve is steep and...
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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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